Oil started the second half of the year flat as investors focused on demand difficulties and a complex supply outlook.
Brent oil held above $75 a barrel last week after capping its losses for four quarters. Oil prices have lost nearly 12 percent since the beginning of the year as the economic recovery in China loses momentum, investors worry about a potential recession in the US and strong export data from Russia and Iran point to an abundance of supplies.
The third quarter is generally regarded by many market watchers as a critical period when the physical market may tighten. Saudi Arabia, one of the OPEC+ leaders, is expected to extend its unilateral 1 million bpd production cut for another month in August.
The U.S. Department of Energy plans to request more oil purchases this week as part of an effort to replenish the Strategic Petroleum Reserves invoked during the energy crisis after Russia’s invasion of Ukraine last year. The US had previously announced that it would purchase 12 million barrels to accelerate the replenishment of reserves.