EBC Markets Briefing | Oil prices pull back on signs of weak global demand

Crude prices dipped on Friday on news an Iranian parliamentary committee is reviewing a bill to ban US and Israeli ships from the Strait of Hormuz, imposing cargo fines of up to 20% on violators.

Even if Oman and Iran agree on traffic management, the waterway shipping volumes will not reach pre-war levels quickly. Saudi Arabia is bracing for "multiple coordinated attacks" by the Houthis, an official said.

According to CNN, Trump acknowledged in an Oval Office meeting that specific advanced munitions are in limited supply, while asserting that less-advanced weapons are still plentiful.

Iran has reportedly threatened to strike critical regional energy infrastructure if the US launches a new attack on its territory, aiming to deter military action by targeting Washington's Gulf allies.

The IEA stated that Middle East conflict disruptions to production and exports will cause global oil demand to drop for the first time since 2020. China's crude imports fell sharply in Q2.

US commercial crude oil inventories rose last week as imports increased and refineries ran at a lower rate, the EIA data showed. Gasoline consumption remained relatively strong, analysts said.

EBC Financial Group analyst says, WTI crude was anchored at a major horizontal pivot line around $77.2. The price signaled a transition into a short-term sideways squeeze or neutral flag pattern, so range trading could be appropriate.

Asset Recap

As of market close on 6 August, among EBC major products, Paycom Software shares led gains after reporting Q2 earnings that comfortably exceeded Wall Street expectations and hiking its guidance.

UPS slid as investors refocus on competitive and volume headwinds. It was trading ex-dividend, which often causes a step-down in the share price roughly in line with the dividend amount.

Swiss CPI slowed to 0.4% in July, down from 0.5% in the previous month to hit its lowest level in four months. Uncertainties about the Strait of Hormuz adds to downward pressures on the Swiss franc.

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