https://arab.news/y7jvk
TOKYO/SINGAPORE: Oil prices fell for a fifth session on Thursday as investors worried about the global demand outlook, despite a decline in US fuel inventories, according to Reuters.
Brent crude futures slipped 10 cents to $75.95 a barrel, while US West Texas Intermediate crude futures fell 23 cents to trade at $71.70 at 9:39 a.m. Saudi time.
The front-month WTI contract for October has dropped 6.9 percent since Aug. 15, while Brent futures are down 6.4 percent over the same period.
Prices have plunged amid a report on Wednesday of revised employment statistics in the US, the world’s biggest oil consumer, that showed fewer jobs were added in 2024 than previously reported, and weak economic data last week from China, the world’s second-largest economy and largest oil importer.
Investors are also expecting OPEC and its allies such as Russia, known as OPEC+, will lift some voluntary output cuts in October, adding more supply.
“Weak global demand and the potential threat on OPEC+ rolling back on their production cuts are weighing on oil,” said Priyanka Sachdeva, a senior market analyst at Phillip Nova, adding that conflict in the Middle East and geopolitical tensions elsewhere are tilting risks to the upside.
Concerns over how OPEC+ production would pan out in the fourth quarter if the cuts are lifted has exacerbated price weakness, though they could be paused or reversed if needed.
“The downward pressure on prices makes it increasingly likely that OPEC+ will have to scrap their plans for gradually increasing supply from October. Failing to do so, will likely put further pressure on prices,” said ING analysts in a client note.
Crude prices have been slipping despite a US government report on Wednesday showing US crude, gasoline and distillate inventories fell in the week ending Aug. 16, at the same time refinery runs increased.
“Despite inventory draws across crude and other key major products ... weak Chinese oil import data and subdued middle distillate demand in the US have helped to reduce geopolitical risk premium for the oil complex,” said Citi analysts in a client note.
Concerns over the Israel-Gaza war have eased in the past week as the US, Israel and Hamas are trying to hammer out a ceasefire deal, though Washington diplomatic efforts earlier this week ended without a truce.
“Upside catalysts for oil may seem limited for now, with rising odds of a ceasefire in the Middle East, which saw market participants pricing out some of the geopolitical risks,” IG market strategist Yeap Jun Rong said in an email.
“Economic conditions in the US, while supportive for upcoming policy easing, does not offer much reassurances for a stronger oil demand outlook just yet,” he added.