Oil Prices Rise on Strong Demand Outlook and Improved Economic Prospects

Oil prices witnessed a significant increase in trading on Wednesday, July 16, supported by positive expectations regarding demand growth in the United States and China, the world's largest oil consumers, along with improved global economic outlook.

Brent crude futures rose slightly by 0.2% to reach $68.87 per barrel, while West Texas Intermediate crude futures increased by about 0.3%, reaching $66.78 per barrel.

This increase comes after two days of relative decline, as the market remained relatively stable in the face of recent threats by U.S. President Donald Trump to impose tariffs on Russian oil buyers. Price movements remained within a narrow range, influenced by conflicting factors, most notably strong seasonal demand associated with increased industrial activity and summer travel in the northern hemisphere, against concerns that trade tensions could hinder economic growth and reduce fuel consumption.

Analysts at the London Stock Exchange group confirmed in a recent report that the current seasonal demand is providing positive momentum for oil prices, especially with industrial activity and travel reaching their peaks. They pointed out that the increase in gasoline consumption in the United States during the Fourth of July celebrations reflects the strength of fuel demand, helping to offset downward pressures resulting from inventory increases and trade concerns.

Despite the economic slowdown in China during the second quarter, the pace of decline was less severe than expected, partially attributed to the accelerated pace of exports in anticipation of U.S. tariffs, easing concerns about the performance of the world's second-largest economy, which is also the largest importer of crude oil.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) expected in its monthly report released on Tuesday an improvement in global economic performance in the second half of the year, strengthening expectations for oil demand growth. The report highlighted the strong performance of the economies of India, China, and Brazil, while the United States and the European Union showed clear signs of recovery since the beginning of the year.