Oil dips after biggest weekly gain in 3 months

July 10, 2023 (MLN): Oil dipped on Monday after the biggest weekly gain since early April as investors juggled signs of tightening supply and persistent demand concerns.

Brent crude is currently trading at $77.69 per barrel, down by 0.47% on the day.

While West Texas Intermediate crude (WTI) is trading at $73.22 per barrel, down by 0.44% on the day.

It is worth noting that this decline comes after Brent crude marked a surge of 4.8% following a pledge by Saudi Arabia and Russia to reduce supply.

The market is flashing signs of strength and speculators have boosted their bullish bets for the global benchmark and West Texas Intermediate crude.

However, Treasury Secretary Janet Yellen said the risk of a US recession is “not completely off the table,” adding an element of caution to the market. She made the remark in a CBS interview broadcast on Sunday.

Oil remains about 9% lower for the year due in part to China’s lackluster economic recovery and aggressive monetary tightening by central banks.

China's factory-gate prices fell at the fastest pace in over seven years in June, government data showed on Monday, as the momentum of economic recovery in the world's second-largest economy has slowed, as Reuters reported.

"The presence of economic slowdowns in China adds to the prevailing uncertainty in the oil market," said Mukesh Sahdev, head of downstream and oil trading at Rystad Energy.

While, a solid US employment report keeps the Federal Reserve on track to boost interest rates this month, maintaining headwinds for crude price.

The US announced on Friday that it’s purchasing 6 million more barrels of crude for the Strategic Petroleum Reserve as the nation continues to slowly refill the emergency stockpile.

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