Oil continued its decline on Monday as political uncertainty in the United States and the Middle East supported prices, offsetting downward pressure from a stronger dollar and weak demand in top importer China.
Brent crude futures fell 13 cents, or 0.2%, to $84.90 a barrel by 0640 GMT, after falling 37 cents on Friday. WTI crude oil was down 6 cents, or 0.1%, at $82.15 a barrel.
The dollar, which strengthened after the failed assassination attempt on Donald Trump, put pressure on oil prices. A strengthening dollar tends to lower oil prices as buyers using other currencies have to pay more for oil.
The assassination attempt over the weekend will create the impression of a deeply divided country ahead of the election.
In the Middle East, talks between Israel and Hamas to end the Gaza conflict were halted on Saturday, but a Hamas official said the next day that talks had not been withdrawn.
However, on Saturday, 90 people died in an Israeli attack targeting the group’s military leader.
Uncertainty around the volatile situation has ensured that the geopolitical premium on oil remains high.
Oil markets are also getting a big boost from OPEC+’s supply cuts, and Iraq’s oil ministry has announced it will compensate for an overproduction from the beginning of 2024.
Last week, Brent fell more than 1.7% after four weeks of gains, while WTI futures fell 1.1% as a decline in crude imports from China, the world’s largest importer, countered strong summer consumption in the United States.
While fundamentals remain supportive, there are concerns about rising demand, largely driven by China.
China’s crude oil imports fell 2.3% to 11.05 million barrels per day in the first half of this year as disappointing fuel demand and independent refiners cut production due to thin profit margins.
Crude oil production at Chinese refineries fell 3.7% in June from a year earlier to 14.19 million barrels per day, according to customs data released on Monday.
China’s economy slowed in the second quarter as a protracted housing crisis and job insecurity weighed on domestic demand, keeping alive expectations that Beijing would need to implement more stimulus.
The number of active oil rigs in the United States, an early indicator of future production, fell by one last week to 478, the lowest since December 2021, Baker Hughes said on Friday.