Oil prices regained most of yesterday’s losses amidst a pledge from the Chinese government to bolster consumption and recent U.S. data that suggests inflation has begun to consistently decelerate. Brent futures settled at $79.63/barrel, up 1.4%, and WTI crude closed at $75.75, up 2.2%. Brent’s premium over WTI fell to its lowest since May. The lower premium reduces the likelihood of energy companies investing in shipping crude cargoes from the U.S. for export.
Looking forward, extreme weather conditions are expected to increase natural gas demand and an anticipated decrease in U.S. shale oil production for August may impact crude supply; the market awaits inventory data.