Oil prices slide for fifth session amid weak demand and OPEC+ uncertainty
Shafaq News/ Oil prices fell for afifth session on Thursday as global demand concerns exerted pressure on themarket despite a decline in US fuel inventories.
Brent crude futures slipped 9 centsto $75.96 a barrel, while US West Texas Intermediate crude futures fell 19cents to trade at $71.74 at 0433 GMT.
The front-month WTI contract forOctober has dropped 6.9% since Aug. 15, while Brent futures are down 6.4% overthe same period.
Prices have plunged amid a report on Wednesday ofrevised employment statistics in the US, the world's biggest oil consumer, thatshowed fewer jobs were added in 2024 than previously reported and weak economicdata last week from China, the world's second-largest economy and largest oilimporter.
Oil investors are also expecting the Organization ofthe Petroleum Exporting Countries (OPEC) and its allies such as Russia, knownas OPEC+, will lift some voluntary output cuts in October, adding more supply.
"Weak global demand and the potential threat onOPEC+ rolling back on their production cuts are weighing on oil," saidPriyanka Sachdeva, a senior market analyst at Phillip Nova, adding thatconflict in the Middle East and geopolitical tensions are tilting risks to theupside.
Concerns on how OPEC+ production would pan out in thefourth quarter if the cuts are lifted has exacerbated price weakness, thoughthey could be paused or reversed if needed.
"The downward pressure on prices makes itincreasingly likely that OPEC+ will have to scrap their plans for graduallyincreasing supply from October. Failing to do so, will likely put furtherpressure on prices," said ING analysts in a client note.
Crude prices have been slipping despite a USgovernment report on Wednesday showing US crude, gasoline and distillateinventories fell in the week ending Aug. 16, at the same time refinery runsincreased.
"Despite inventory draws across crude and otherkey major products ... weak Chinese oil import data and subdued middledistillate demand in the US have helped to reduce geopolitical risk premium forthe oil complex," said Citi analysts in a client note.
Geopolitical concerns from the Israel-Gaza war haveeased in the past week as the US, Israel and Hamas are trying to hammer out aceasefire deal, though US diplomatic efforts earlier this week ended without atruce.
"Upside catalysts for oil may seem limited fornow, with rising odds of a ceasefire in the Middle East, which saw marketparticipants pricing out some of the geopolitical risks," IG marketstrategist Yeap Jun Rong said in an email.
(Reuters)
