After beginning the month at $86.6/bbl, crude oil futures quickly reached a two-month high of $87.4/bbl. Expectations that peak summer fuel demand would lead to a supply deficit boosted prices. The American Automobile Association projected a 4.8% rise in car travel this summer compared to last year, which supported this view. This was also boosted by the data which showed the largest weekly draw on US crude stocks since July 2023- a fall of 12.1 million barrels during the last week of June. Following the high, Brent crude followed a downward trend for the rest of the month. Trading around the $85/bbl mark by mid-month, as concerns over supply disruptions eased. Hurricane Beryl had minimal impact on US Gulf Coast production, and Canadian output remained steady despite the threat of wildfires according to Goldman Sachs. On the demand side, data from China gave renewed cause for concern, revealing that China’s total fuel oil imports dropped by 11% in H1 2024 compared to the same period in 2023. This was highlighted by an unexpected interest rate cut towards the end of the month in response to disappointing GDP figures, intended to stimulate growth. At the end of the month Brent fell to $78.6/bbl, a level not seen since early June, predominantly driven by further weak economic data. The International Energy Agency showed Q2 2024 demand down to 710,000 bpd globally, citing China as a significant factor. On the supply side, drops in Saudi flows were offset by field maintenance easing, resulting in 150 kbpd growth in June. Also, the strength of the US dollar pressured demand expectations, as the Fed voted to leave interest rates in place, making energy products priced in dollars more expensive for buyers in other currencies. Brent crude finished June at $80.8/bbl after political tensions in the Middle East flared, causing a sharp rebound.

Starting June trading at $1.264 against USD, near a six-week low, the pound performed strongly throughout the beginning of the month. US services PMI data declined, prompting reports that the Federal Reserve was confident that disinflation had resumed and raising expectations of an interest rate cut. This weakened the US dollar generally. Meanwhile, Labour’s landslide general election victory was received positively by markets, with the party emphasising economic stability as a key priority. This drove sterling’s upward trend, whereas US inflation cooled to its slowest pace since 2021 during June, sending a strong signal that the Fed will begin cutting interest rates soon, pushing the pound up to a high of $1.301, the first time since July 2023 that sterling broke the $1.3 mark against the dollar. The assassination attempt against Donald Trump gave the US a boost, as markets reacted to a greater chance that the former president would win the 2024 election.  UK inflation steadied at 2% for June, above forecasts, reducing bets that interest rates would be cut in August. However, the pound began to trend down for the remainder of the month, as data showed that the UK’s private sector output rose in July, including the strongest manufacturing data since February 2022, supporting the case for a cut. A majority of economists polled by Reuters anticipated a 25 basis point reduction ahead of the meeting, although swaps markets were less decisive. JPMorgan stated that it expected a 5-4 vote in favour of reducing rates, pressuring sterling to finish July at $1.284 against the dollar.

The beginning of July saw reformist candidate Masoud Pezeshkian win Iran’s presidential election to replace its previous leader who was killed in a helicopter crash in May. Winning in a run-off, Pezeshkian represents a more moderate voice than his opponent, however due to the control of the supreme leader many boycotted the election due to a lack of real possibility of change. Ukraine’s drone campaign against Russia continued, with major oil infrastructure damaged. This influenced the decision of Russia to reimpose a gasoline export ban from August, however Deputy PM Alexander Novak dispelled rumours that this would be extended to diesel exports. One week after the assassination attempt against Donald Trump, President Biden announced his intention to drop out of the presidential race. This news was broadly welcomed by stock markets, although from a commodities standpoint somewhat reduced the likelihood of the fossil-fuel friendly Trump winning the election, whose odds have declined since the decision. Towards the end of the month, a rocket attack on a football pitch in the Israel-occupied Golan Heights region, killing 12 people, mostly children. Hezbollah has strongly denied involvement, however this came after increasing military action on the Israel-Lebanese border, with Netanyahu stating that a “heavy price” will be paid for the attack, increasing fears that any retaliation against the Iran-backed group could cause a broader conflict. On 31st July, news that Hamas’s political leader, Ismail Haniyeh, was killed in an overnight airstrike in Tehran rocked energy markets, with Iran vowing to avenge his death- promising “harsh punishment” which would likely delay ceasefire efforts in Gaza which had been making promising developments.