Oil prices fell for a fifth session on Thursday as investors worried about the outlook for global demand despite the decline in US fuel stockpiles.
Written by UNN with reference to Reuters.
Brent crude futures were down 10 cents at $75.95 a barrel, while West Texas Intermediate futures fell 23 cents to $71.70 at 06:39 GMT. The WTI contract for the first month is down 6.9% since August 15, while Brent futures fell 6.4% over the same period.
Prices declined on the back of a report on Wednesday that showed revised employment statistics in the United States, the world's largest oil consumer. The data showed that fewer jobs were created in 2024 than previously reported. In addition, weak economic data from China, the world's second largest economy and largest oil importer, also contributed to the price decline.
Investors also expect that the Organization of the Petroleum Exporting Countries (OPEC) and its allies such as Russia, known as OPEC+, may lift some voluntary production cuts in October, leading to an increase in supply.Oil prices fell for a fifth straight session on Thursday as investors worried about the outlook for global demand despite the decline in US fuel stockpiles.
Priyanka Sachdeva, senior market analyst at Phillip Nova, noted that weak global demand and the potential threat of OPEC+ refusing to cut production put pressure on oil, although the conflict in the Middle East and geopolitical tensions in other regions tilt the risks in favor of rising prices.
Investors are also concerned about how OPEC+ production will develop in the fourth quarter if production cuts are lifted, although they can be suspended or canceled if necessary.ING analysts note that the growing pressure on prices raises the possibility that OPEC+ may abandon its plans to gradually increase supply from October, as their implementation is likely to lead to further price declines.
Oil prices are falling despite a US government report showing that US crude oil, gasoline, and distillate stockpiles declined during the week ended August 16, while refineries increased their output.
Citi analysts noted that despite the decline in crude oil and other key product inventories, weak data on oil imports from China and low demand for middle distillates in the United States contributed to a decrease in the geopolitical premium in oil markets.
Concerns about a war between Israel and Gaza eased last week as the U.S., Israel, and Hamas attempt to reach a cease-fire agreement, although U.S. diplomatic efforts earlier this week ended without a truce.
IG market strategist Yep Jun Rong noted in an email that catalysts for oil's growth appear limited at the moment as the chances of a ceasefire in the Middle East are increasing, forcing the market to reassess geopolitical risks. He also added that economic conditions in the US, while favorable to future policy easing, do not yet provide confidence in improving oil demand forecasts.
Recall
Yesterday, oil prices fell to a two-week low as supply threats in the Middle East eased after progress in the Gaza ceasefire talks and a deterioration in China's economic performance, which affected global demand for fuel.