Supply-demand dynamics, inventory fluctuations, and geopolitical tensions characterize the crude oil market landscape. Analysts at Morgan Stanley project the market to reach equilibrium by the fourth quarter of this year, potentially transitioning to a surplus by 2025. As traders await crucial US oil inventory data, the market is also reacting to geopolitical events, such as the Israeli attack on a Yemeni shipping terminal in retaliation for a recent drone attack on Israel. Also, a Ukrainian drone attack on Russia's largest Black Sea oil refinery may cause global supply disruption. Despite these tensions, the short-term outlook for oil prices remains bearish, influenced by ample inventories and weak demand.
Traders are focusing on the release of US oil inventory data. The American Petroleum Institute (API) will provide its estimates on Tuesday. The prior week's report showed US crude oil inventories declining by 4.44 million barrels for the week ending July 12. Today's API report is expected to show a smaller draw of -2.47 million barrels. On Wednesday, the US Energy Information Administration (EIA) will release its report, which is expected to show a build of 0.7 million barrels, a first in three weeks.
