Oil falls on economic concerns, despite strong demand outlook
Shafaq News/ Oil prices slipped onThursday after a surge in the previous session on a larger-than-expected drawin U.S. gasoline stocks, as markets weighed macroeconomic concerns against firmnear-term demand.
Brent futures fell 5 cents to $70.9a barrel by 0426 GMT, while U.S. West Texas Intermediate crude futures shed 10cents to $67.58 a barrel.
Both benchmarks rallied about 2% onWednesday as U.S. government data showed tighter-than-expected oil and fuelinventories.
U.S. gasoline inventories fell by5.7 million barrels, more than the 1.9 million-barrel draw expected byanalysts, while distillate stocks also dropped more than anticipated - despitegains in crude stocks.
"Declining U.S. gasolineinventories raised expectations for a seasonal demand increase in spring, butconcerns about the global economic impact of tariff wars weighed on themarket," said Hiroyuki Kikukawa, chief strategist of Nissan SecuritiesInvestment.
"With strong and weak factorsprogressing simultaneously, it has become difficult for the market to leandecisively in one direction or the other," he added.
Donald Trump threatened on Wednesdayto escalate a global trade war with further tariffs on European Union goods, asmajor U.S. trading partners said they would retaliate for trade barriersalready erected by the U.S. president.
Trump's hyper-focus on tariffs hasrattled investors, consumers and business confidence and raised U.S. recessionfears.
Meanwhile, the Organization of thePetroleum Exporting Countries said on Wednesday that Kazakhstan led a sizeablejump in February crude output by the wider OPEC+, highlighting a challenge forthe producer group in enforcing adherence to agreed output targets.
Worries about fumbling jet fueldemand weighed further on markets, JP Morgan analysts said, adding that U.S.Transportation Security Administration data showed passenger volumes for Marchhave decreased by 5% year-over-year, following stagnant traffic in February.
However, firm demand expectationslimited overall market weakness.
Signs of robust U.S. demand andUkraine's deployment of 377 drones targeting Russian energy infrastructure andmilitary installations supported prices, said JP Morgan analysts in a clientnote.
"As of March 11, global oildemand averaged 102.2 million barrels per day, expanding 1.7 million barrelsper day year-over-year and exceeding our projected increase for the month by60,000 barrels per day," they added.
(REUTERS)
Only the headline was edited byShafaq News.
