Lagos — Crude oil futures remained near their low. The market found some support in a larger-than-expected drawdown in distillate inventories, which fell by 2.8 million barrels.
This could support oil demand expectations in the U.S. to a certain extent and help provide a floor for the market.
Meanwhile, expectations that the Federal Reserve may ease interest rates later this year could support positive sentiment. Moreover, geopolitical tensions in the Middle East, including Israel’s ground operations in Gaza and U.S. airstrikes on Houthi targets in Yemen, could drive the market to the upside.
However, the outlook remains contingent on global economic growth at a time when trade tensions are increasing. In this regard, concerns over China’s oil demand persist.
A continued slowdown in imports from China could limit oil’s potential for a rebound. This comes in addition to the potential for additional supply from OPEC and the U.S., which could weigh on the market.
*Maria Agustina Patti Financial Markets Strategist Consultant to Exness
