Brent Crude Oil Dips Below $80 per Barrel, Hitting Nearly Two-Month Lows

Brent crude oil prices have fallen below $80 per barrel, reaching their lowest levels in nearly two months.

This decline comes on a day when the U.S. Department of Energy announced the signing of a contract to purchase 4.65 million barrels of crude for the Strategic Petroleum Reserve.

Brent crude oil futures fell by 1.5% to $79.05 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped 1.8% to $75.83 per barrel. Last week, Brent and WTI lost 1.8% and 3.7% respectively, due to decreased demand from China and hopes for a ceasefire agreement in Gaza.

The U.S. Department of Energy announced that Exxon Mobil will supply 3.9 million barrels under the new contract, with the remaining amount provided by Macquarie Commodities Trading US LLC. The average purchase price is approximately $76.92 per barrel. This purchase is part of an ongoing effort to replenish the Strategic Petroleum Reserve following a record release of 180 million barrels in 2022, aimed at controlling gasoline prices, which surged above $5 per gallon after Russia’s invasion of Ukraine. This release reduced the reserve to its lowest level in 40 years.

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Recent data showed that China’s total fuel oil imports fell by 11% in the first half of 2024, raising concerns about demand prospects in the world’s largest crude importer. Prices also dropped on Friday following news that the Dangote oil refinery in Nigeria is reselling cargoes of U.S. and Nigerian crude due to technical issues.

Markets are also closely watching Venezuela after the country’s electoral authority announced that President Nicolás Maduro won a third term with 51% of the votes, despite multiple exit polls indicating an opposition victory. The United States had previously stated it would “calibrate” its sanctions policy toward Venezuela based on the conduct of the elections in the OPEC member country.

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ABOUT THE AUTHOR See More
Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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