Oil prices ended July significantly lower and continued to decline into August after data released on Tuesday showed U.S. crude stockpiles rose unexpectedly. Data released from the American Petroleum Institute on Tuesday showed a rise in U.S. crude inventories by 5.6 million barrels last week, more than double the 2.8 million barrel decline predicted by Reuters economists. The U.S. Energy Information Administration will be releasing its own statistics later on Wednesday.
U.S. WTI futures were down 0.65 percent on Wednesday morning, to $68.31 per barrel after plummeting close to 2 percent on Tuesday. The commodity fell nearly 7 percent in July, its steepest decline in over two years. Brent crude futures were unchanged as of 10 a.m. HK/SIN after falling over 6 percent in July. It was trading at $74.25 per barrel in the first hour of Hong Kong’s trading day.
Also weighing on oil prices were expectations that the supply disruption in the Bab al-Mandeb Strait would be resolved in the coming days after Yemen’s Houthi group announced that it would consider unilaterally stopping attacks in the region in order to promote peace. Last week Saudi Arabia temporarily halted all oil shipments through the strait due to attacks on two crude vessels that were carried out by the Houthi group.
Speculation about oil prices and the potential for increased supply was an invitation extended by U.S. President Trump earlier this week to Iranian President Hassan Rouhani “without preconditions.” The meeting may impact Trump’s impending sanctions against Iran and may shake the oil markets further.