BAKU, Azerbaijan, July 14. Benchmark crude oil futures declined by more than $20 per barrel in June as the deteriorating economic outlook triggered a broad sell-off in the market, Trend reports with the reference to the latest research from the International Energy Agency (IEA).
“At the time of writing, Brent was below $100 per barrel, while WTI traded at around $96 per barrel. Price premiums for physical barrels widened on rising seasonal demand for both crude and products while supply remains constrained,” the report noted.
According to the report, futures broke through technical thresholds in early June, and Brent crude fell to almost $100 per barrel before partially recovering.
However, while the absolute level of futures declined, the main supporting factors remained, maintaining the constant strength of the paper market lag and physical market premiums to futures. The latter increased during the month as seasonally growing demand for crude oil and petroleum products intensified amid a reduction in crude oil supply and processing capacities. Oil prices in the North Sea fell to $109.82 per barrel on July 6 but increased to about $115 per barrel on July 8, which is $8 below the June average of $123.62 per barrel.
“Oil prices collapsed with extreme volatility over June, as market sentiment focused on the worsening macro headwinds, setting in motion the broad lower price trend. Rising inflation, a strong US dollar, the deteriorating economic environment, as well as the impact of high energy prices, constituted a toxic cocktail for financial markets in general, and paper oil markets in particular,” the IEA explained.
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