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NEW YORK, July 22 (Reuters) – Oil prices fell for a second consecutive 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 rising stockpiles and signs of weak demand.
Brent crude futures fell 23 cents, or 0.3%, to settle at $82.40 per barrel, the lowest since June 11. U.S. West Texas Intermediate crude futures for August delivery expired on Monday after falling 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 escalating 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, ample inventories and soft 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, dragging Brent prices down to the mid-to-high $70s range in 2025, according to analysts at Morgan Stanley.
Global petroleum inventories rose 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 noted.
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.
In the Middle East, Israeli fighter jets struck Houthi military targets near Yemen’s Hodeidah port on Saturday, killing at least six people. The Houthis on Sunday told media that they will continue to attack Israel and not abide by any rules of engagement.
Israel also sent tanks back into the greater Khan Younis area of Gaza, and at least 70 Palestinians were reported killed by Israeli fire, Gaza medics said on Monday.
Elsewhere, top oil importer China surprised markets by lowering a key short-term policy interest rate and benchmark lending rates to boost 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,” said UBS analyst Giovanni Staunovo.
The U.S. Federal Reserve will hold a policy meeting on July 30-31, with investors expecting it to keep rates steady, though there have been signs of a possible cut in September.
“If we get an indication of a [near-term] rate cut, the Fed could be positive for risk sensitive assets like oil,” Staunovo said.
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