Here's a look at what happened in oil markets in the week of July 6-10 and what the focus will be in the days to come.
OVERVIEW: Oil prices are on track for weekly gains after several days of volatile trading, with Brent crude holding above $76 a barrel and West Texas Intermediate hovering around $72 a barrel. Futures surged earlier this week after the U.S. and Iran exchanged a series of strikes and President Trump declared an end to the eight-week ceasefire. Markets are now watching closely to determine whether the latest flare-up was an isolated episode or the start of a broader escalation in the Gulf.
MACRO: Concerns over persistent inflation and the prospect of interest rates staying higher for longer--or even rising further--remain firmly in focus. Minutes from the Federal Reserve's meeting last month, released on Wednesday, showed that policymakers broadly agreed they would likely need to raise rates if inflation remains elevated this year. At the same time, officials indicated they could keep policy unchanged if price pressures ease more quickly than expected.
GEOPOLITICAL RISKS: The U.S. and Iran exchanged a series of attacks this week, marking their most serious escalation since agreeing to a 60-day ceasefire in mid-June. President Trump declared the truce effectively over and revoked a license that had allowed Iran to sell oil on the open market. Meanwhile, traffic through the Strait of Hormuz--a vital shipping lane that normally carries about one-fifth of global oil and liquefied natural gas flows--is close to a halt again, the IEA said.
Even so, some analysts say the oil market's risk premium remains well below the levels seen between March and May, suggesting that investors largely view the latest tensions as a temporary disruption and continue to expect diplomatic negotiations to resume.
Oil prices also found support this week from intensified Ukrainian drone strikes on Russian energy infrastructure. Damage to refineries has tightened supplies of refined oil products, prompting Russia to impose a ban on diesel exports through the end of July.
SUPPLY AND DEMAND: "Nobody said that normalising energy output/exports from the Middle East would be easy, and so it is proving," analysts at Capital Economics said. "While we still think a return to glut conditions in the global oil market remains on the cards next year, the latest developments support our view that energy prices will experience bouts of upward pressure in the second half."
Global oil demand is recovering after months of disruptions in the Middle East, but a flare-up in fighting between the U.S. and Iran has cast uncertainty over the outlook just as markets were bracing for a new wave of supply next year, the IEA said. While consumption is projected to decline by 1 million barrels a day this year, the pace of contraction is easing sharply. The Paris-based energy watchdog, a group of Western nations and their allies, currently forecasts demand to rise by 1.9 million barrels a day in 2027.
The U.S. Energy Information Administration sharply revised its outlook this week, slashing its forecast for the global supply deficit in the third quarter from just over 7 million barrels a day to around 2 million. The agency also now expects the market to swing into surplus in the final quarter of the year.
WHAT'S AHEAD: OPEC will release its latest market outlook on Monday. The report will be closely watched, as the group remains far more bullish on oil demand than the IEA. Investors will be looking for clues on how quickly OPEC expects Middle East oil production and exports to normalize.
China's latest oil data will also be in focus. Markets expect an increase in both crude imports and refinery throughput. A stronger-than-expected rebound would likely support oil prices by signaling that demand in the world's largest crude importer is gaining momentum, analysts say.
In the U.S., attention will turn to a busy economic calendar featuring speeches from Federal Reserve officials, the Consumer Price Index, the Producer Price Index, and the latest consumer sentiment data.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
July 10, 2026 10:13 ET (14:13 GMT)
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