On Tuesday, U.S. crude oil dropped over 1%, continuing a recent decline and wiping out most of its year-to-date gains following OPEC+’s decision to boost production from October.
Both U.S. crude oil and global benchmark Brent reached four-month lows earlier in the day. This marks the fifth consecutive session of decline for U.S. crude, with the July contract plummeting 3.6% on Monday after the OPEC+ meeting.
Here are Tuesday’s closing energy prices:
- West Texas Intermediate July contract: $73.25 a barrel, down 97 cents, or 1.31%. Year to date, U.S. oil has gained 2.23%.
- Brent August contract: $77.52 a barrel, down 84 cents, or 1.07%. Year to date, the global benchmark is up 0.62%.
- RBOB Gasoline July contract: $2.34, up 0.6%. Year to date, gasoline futures are up 11.74%.
- Natural Gas July contract: $2.58, down 6.17%. Year to date, natural gas is up 2.86%.
“The market reaction is disheartening for oil producers but brings relief to consumers,” noted Tamas Varga, an analyst at oil broker PVM, in a Tuesday statement.
“Comparing last week’s price levels to yesterday’s settlements, it’s clear that the announcement of gradual production cuts reversal played a significant role in turning sentiment bearish,” Varga added.
He suggested that the downside should be contained as long as summer gasoline demand remains strong. Additionally, the recent oil sell-off could alleviate global inflationary pressures, he noted.
Some of the oil decline may also stem from concerns about economic growth, as indicated by Monday’s report of contraction in the U.S. manufacturing sector.
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