Oil prices fell for a fifth consecutive session on Thursday amid concerns over global demand, despite a decline in US fuel inventories. Brent crude futures slipped by 10 cents to $75.95 a barrel, while US West Texas Intermediate crude futures dropped 23 cents to $71.70. The October WTI contract has decreased by 6.9 per cent since August 15, and Brent futures are down 6.4 per cent over the same period.
The decline follows revised US employment statistics showing fewer jobs added in 2024 than previously reported and weak economic data from China, the world's second-largest economy and largest oil importer. Investors are also anticipating that OPEC+ may lift some voluntary output cuts in October, which could increase supply.
"Weak global demand and the potential rollback of OPEC+ production cuts are weighing on oil prices," said Priyanka Sachdeva, a senior market analyst at Phillip Nova. She noted that geopolitical tensions and conflicts in the Middle East could also influence prices.
ING analysts suggested that the downward pressure on prices might lead OPEC+ to reconsider plans to increase supply from October. Failure to address this could put further pressure on prices.
Crude prices have been falling despite a US government report showing declines in US crude, gasoline, and distillate inventories for the week ending August 16, alongside increased refinery runs.
Citi analysts highlighted that weak Chinese oil import data and subdued US middle distillate demand have reduced the geopolitical risk premium for oil. The easing of concerns over the Israel-Gaza conflict and potential ceasefire negotiations have also contributed to the market's cautious outlook.
IG market strategist Yeap Jun Rong noted that while economic conditions in the US might support upcoming policy easing, they do not yet provide much reassurance for a stronger oil demand outlook.— Reuters
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