Brent crude futures dropped 23 cents, or 0.3%, to settle at $82.40 per barrel, the lowest since June 11
Oil prices dropped for a second straight session on Monday to their lowest level in over a month, as investors looked past U.S. President Joe Biden’s decision to end his reelection bid and focused on growing stockpiles and signs of weak demand.
Brent crude futures dropped 23 cents, or 0.3%, to settle at $82.40 per barrel, the lowest since June 11. U.S. WTI crude futures for August delivery expired on Monday after declining 35 cents to $79.78 a barrel, also a one-month low.
Biden ended his campaign on Sunday and endorsed Vice President Kamala Harris as the Democrat who should face Republican Donald Trump in the November election.
Traders took Biden’s decision in stride while shrugging off growing tensions in the Middle East, U.S. fuel distributor TACenergy’s trading desk wrote on Monday. Market participants were focusing on a weak technical outlook, massive inventories and weak demand, they wrote.
While the oil market is visibly tight, it is expected to reach a balance by the fourth quarter and a surplus by next year, pulling Brent prices down to the mid-to-high $70s range in 2025, as per analysts at Morgan Stanley.
Global petroleum inventories increased last week, according to a StoneX analysis. Total oil and refined products stockpiles are trending higher in all major trading hubs except Europe, StoneX analyst Alex Hodes stated.
Energy policy will likely be a core debating point between Harris and Trump, but Citi analysts believe neither will promote policies that have an extreme effect on oil and gas operations as core positions.
Elsewhere, top oil importer China surprised markets by lowering a key short-term policy interest rate and benchmark lending rates to bolster its economy, but the move failed to support oil prices.
The Chinese interest rate cut has been too small to lift overall sentiment for crude oil, according to UBS analyst Giovanni Staunovo.
