The oil price rally has failed to gain any kind of momentum three weeks after tensions in the Middle East escalated despite market fundamentals strengthening. Brent crude for December delivery was down 1.8% to trade at $88.49 per barrel at 1400 hrs ET in Thursday’s intraday session while the December WTI contract fell by a similar margin to change hands at $83.88 per barrel. Brent has now declined 7.0% over the past week while WTI is down 4.
Energy Information Administration EIA shows that U.S. crude production grew 0.7% to 12.99 million barrels per day bpd in July, its highest since November 2019, when production hit a peak of 13 million bpd. Texas production grew 1.3% to 5.6 million bpd in July, its highest on record; North Dakota's output increased 1.2% to 1.2 million bpd while production from New Mexico climbed 0.6% to 1.8 million bpd. The demand side of the equation is equally encouraging.