Oil prices approached 3-month lows on Wednesday, pressured by concerns about declining demand in the United States and China, the world’s biggest oil consumers, after falling to their lowest levels in more than three months in the previous session.
Brent crude futures were up 15 cents to $81.76 a barrel as of 06:36 GMT, while West Texas Intermediate (WTI) crude futures were down 2 cents to $77.35 a barrel. Both benchmarks fell to their lowest level since July 24 on Tuesday.
The market is less concerned about the potential for supply disruptions in the Middle East and anticipates a balanced easing.
US crude oil inventories rose by almost 12 million barrels last week, market sources said late Tuesday, citing figures from the American Petroleum Institute (API). The US Energy Information Administration (EIA), which can confirm the data, postponed the release of weekly inventory data until the week of November 13.
U.S. crude oil production this year will rise slightly less than previously expected, but demand will decline, the EIA said Tuesday. EIA expects total oil consumption in the country to fall by 300,000 barrels per day this year, reversing its previous forecast of a 100,000 barrel per day increase.
Additionally, with the easing of US sanctions, Venezuela’s crude oil production is estimated to increase by less than 200,000 barrels per day (bpd), to an average of 900,000 bpd by the end of 2024.
Further easing supply crunch concerns, net seaborne oil exports from the six OPEC countries that have announced cumulative production cuts worth 2 million barrels per day (bpd) since April 2023 are estimated to remain just 0.6 million bpd below April levels.
Data from China, the world’s largest crude oil importer, also increased doubts about the demand outlook. The world’s second-largest economy’s crude oil imports grew strongly in October, but China’s total exports of goods and services contracted faster than expected, raising fears of weakening global demand.
In addition to the pressure on oil prices, a modest rebound in the U.S. dollar from recent lows has also made oil more expensive for holders of other currencies.
On the bright side, producer group OPEC expects the global economy to grow and fuel demand to increase despite economic challenges such as high inflation and interest rates.
Meanwhile, China’s central bank governor said on Wednesday that the country is expected to meet its annual gross domestic product growth target this year. Beijing has set an economic growth target of around 5 percent for this year.