Oil Prices Rebound Amid Supply Concerns and Strong U.S. Retail Data

Highlights:

• Crude oil prices rose after three days of losses, buoyed by strong U.S. retail sales and supply risks.
• Saudi Arabia increased output to 9.752 million barrels per day in June amid regional tensions.
• European gas storage remains below average as Norwegian outages cut exports.

Oil Market Finds Support After Three-Day Slide

Crude oil prices ticked higher at the time of writing, reversing a three-day losing streak as traders weighed strong U.S. retail sales data and persistent concerns over global supply disruptions. According to Australia and New Zealand Banking Group Limited (ASX: ANZ), despite a recent uptick in OPEC+ output, investors continue to perceive the oil market as fundamentally tight.

OPEC+ Output Rises, but Risks Remain

Saudi Arabia ramped up production in June to 9.752 million barrels per day, with export flows reaching 6.43 million barrels per day in the first half of July. The increase is seen as a response to regional instability. Meanwhile, Iraq has suffered a minor production loss of around 2,000 barrels per day following drone strikes on oil fields in Kurdistan, adding to the underlying risk premium in the market.

Natural Gas Prices Steady Amid European Supply Woes

Global natural gas prices are also holding firm, supported by unexpected outages at Norway’s Nyhamna and Kollsnes processing plants. The disruptions have reduced daily exports from 320 million cubic meters to 270 million cubic meters, adding pressure on European energy supplies. ANZ noted that Europe’s gas storage is currently at just 63% capacity—well below the five-year average of 72%—underscoring the urgency for increased injections ahead of the colder months.

Investor Outlook Cautiously Bullish

The combination of resilient demand signals from U.S. consumers and growing concerns over global supply shortfalls is lending renewed strength to energy markets. Traders are now watching for further developments in the Middle East and Europe that could tighten supply further and support a potential rally in prices.

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