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Oil Dips as Markets Weigh China Data, Easing Stock Worries

On Wednesday, oil slipped after cooling China inflation data, while traders weighed the rising ceasefire agreement in Gaza as negotiations resume.

In the Asian afternoon session, Brent futures for September contracts declined by -0.64% to $84.12 per barrel and later surged by 0.11% to $84.75. West Texas Intermediate futures for August delivery fell by -0.57% to $80.95 and later rose by 0.23% to $81.60 a barrel.

Both oil contracts have lost over -3.00% in the previous three consecutive sessions due to Monday’s onslaught of Hurricane Beryl in Texas.

Moreover, crude and gas firms have resumed some operations. Some ports have reopened, most producers and factories are building up stock despite some facilities sustaining damage, and power has not been fully recovered.

According to analysts, oil prices have been pressured amid cooling tensions in the Middle East and China’s underwhelming consumer price index data (CPI).

In June, consumer prices in Beijing grew for five consecutive months but missed expectations, while the producer price decline continued.

Moreover, in the Middle East, talks over the Gaza ceasefire will resume in Doha with the intelligence chiefs of Egypt, the US, and Israel.

According to the American Petroleum Institute (API) data, US crude oil and gas output declined last week. This shows that summer fuel demand remains steady and drives recovery after days of losses.

API Data Reveals US Oil Stockpile Withdraw

On Tuesday, API data revealed that US oil inventories pulled back 1.90 million barrels (MB), missing the 0.25 MB outlook.

Moreover, gasoline supply dipped by 3.00 MB, while distillates surged by 2.30 MB, showing mixed demand for fuel and heating oil amid extreme weather events.

Meanwhile, reports show that last week’s draw comes after a massive drawback in the precedent week pullback due to record-high travel demand during Independence Day.

However, it continues to be seen whether this travel demand will remain in the forthcoming weeks, especially given the extreme weather conditions in most parts of the country.

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