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On August 3rd, WTI crude oil closed down by $1.81 (-2.65%) at $66.50, while RBOB gasoline fell by $0.0355 (-1.62%). The decline in prices is attributed to a rally in the dollar index, which pressured most commodities, alongside a Bloomberg report indicating that OPEC+ is discussing pausing oil production increases from October due to concerns over a potential slowdown in global energy demand.
OPEC+ plans to increase crude production by 548,000 barrels per day starting August 1, exceeding prior expectations. The International Energy Agency notes that inventories are accumulating at a rate of 1 million barrels per day, with a projected surplus of 1.5% of global crude consumption in Q4 2023. Additionally, US oil production fell by 0.4% to 13.385 million bpd for the week ending July 4, while active US oil rigs also decreased to a 3.75-year low of 425 rigs.
Concerns are further heightened by geopolitical tensions after Yemen’s Houthi rebels attacked merchant ships in the Red Sea, which could impact shipping costs and insurance, making Middle Eastern crude supplies more expensive.
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