Oil quotes continue to trade in the $66.6-67.3 area. After a pulse growth at the beginning of last week, Brent is consolidating in a sloping price channel, forming a flag. It is a pattern of trend continuation, so after the completion of this formation, new attempts to continue the upward trend can be expected. It is very likely that this will happen on Wednesday, when data on US crude oil inventories will be published. The market is very volatile lately during the release of these statistic.
The market is being supported by the impact of tropical storm Barry. Due to bad weather, about 73% of oil production in the Gulf of Mexico was suspended on Sunday. Increasing tension in the Middle East also helps the buyers. Iran is ready to sit at the negotiating table, but only if the United States lifts the sanctions and returns to the agreement on the nuclear program. And the UK promises to release the captured tanker Grace 1 with Iranian oil if it will not be sent to Syria, which is under EU sanctions.
A negative factor for the oil market remains the IEA report published last week. Despite the decline in oil production in OPEC + countries, in the first half of 2019, oil supply exceeded demand by 900 thousand bpd. In the second quarter, an excess of about 500 thousand barrels per day (bpd) is expected, while a deficit of 500 thousand bpd was previously expected.