Nil, Baby, Nil; WTI Extends Losses Despite Big Crude Production Drop, Inventory Draw

Oil prices continued their downward trend for a fourth consecutive day, despite a reported decrease in US oil inventories by the American Petroleum Institute (API). A trade deal between the US and Japan was reached, introducing a 15% tariff on Japanese imports. Discussions regarding a potential extension of the US-China trade truce are planned for next week. These talks may encompass China's continued purchases of oil from sanctioned nations like Russia and Iran. An upcoming August 1st deadline for reciprocal US tariffs adds pressure to negotiations. The official government data on oil inventories showed a larger crude oil draw than the API report. However, other inventory data points aligned between both reports. The ongoing Strategic Petroleum Reserve (SPR) drawdowns worsened the overall commercial crude inventory reduction. US crude oil production significantly decreased to its lowest level since January, impacting supply. Despite the positive inventory data, WTI oil prices extended their losses.