Oil prices rose slightly on Tuesday, but the rebound was weak. Brent oil settled at around $73.30 and WTI oil settled at $69.20. The market has returned to levels that were seen before the Iran war. That indicates that traders are no longer paying a big geopolitical premium. While the immediate risk has eased in the Middle East, the market is still cautious as the U.S.-Iran relations can shift quickly.
Now the supply outlook is gaining more importance for oil prices. In June, the UAE raised its crude production above 3.8 million bpd, the highest since April 2020. OPEC+ also agreed to ramp up output targets from August, up from June and July increases. These supply gains limit the upside potential for oil prices as a potential influx of crude could come at a time when oil demand growth is not guaranteed.
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