Futures Movers: U.S. oil benchmark pulls back from 3-month high

Oil futures edged lower Tuesday, pulling back after a strong July performance that saw the U.S. benchmark close the previous session at its highest in more than three months.

Price action
West Texas Intermediate crude for September delivery CL00, -0.23% CLU23, -0.23% CL.1, -0.23%, fell 47 cents, or 0.6%, to $81.33 a barrel on the New York Mercantile Exchange.
October Brent crude BRN00, -0.16% BRNV23, -0.16%, the global benchmark, declined 42 cents, or 0.5%, to $85.01 a barrel on ICE Futures Europe.
Market drivers
Both WTI and Brent ended Tuesday at their highest since April 14, after logging strong July gains. Crude erased year-to-date losses last month, buoyed by supply cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russia. That includes a voluntary reduction of 1 million barrels a day by Saudi Arabia for July and August, that’s expected to be rolled over into September.

Oil’s lift has been credited to a few factors that have been generally credited as optimistic. First is the expectation that major central banks are near the end of a series of aggressive rate hikes and other measures. There are also positive reactions to measures announced by Chinese authorities aimed at boosting the economy after a lackluster response to the lifting of strict COVID curbs.

“With demand from the world’s two largest consumers of crude set to increase and the leading global exporter cutting production, oil prices continue to find support as traders’ price-in a scenario of tighter supply and growing demand,” Ricardo Evangelista, senior analyst at ActivTrades, said in a Tuesday note.