Oil prices fell on Friday on signs that demand continues to underperform amid a dismal economic recovery in China, the world’s largest importer of crude.
Brent crude futures were down 65 cents, or 0.9%, at $71.91 a barrel by 0450 GMT. WTI crude futures were down 62 cents, or 0.9%, at $68.08.
Oil prices have held onto the $71.00 support level for a bit this week, but the lack of a tangible upward catalyst suggests the price recovery remains modest.
Expectations of higher supply from the US and OPEC+, while doubts about China’s economic recovery continue to raise concerns, make the prospect of a December rate cut more likely to be a gamble for a less lenient Fed.
China’s oil refineries processed 4.6% less crude in October than a year ago, the seventh month of annual declines, as some facilities were closed and smaller independent refineries were forced to cut operating rates.
Operating rates fell as China’s factory output growth slowed last month and its property sector showed no signs of reviving even as consumer spending picked up.
Oil prices fell this week as major forecasters said market fundamentals were on a downward trend.
The International Energy Agency (IEA) estimates that global oil supply will exceed demand in 2025 even if OPEC+ cuts continue, as rising output from the US and other producers outpaces sluggish demand.
The Paris-based agency raised its 2024 demand growth forecast by 60,000 bpd to 920,000 bpd and left its 2025 oil demand growth forecast slightly unchanged at 990,000 bpd.
OPEC this week lowered its global oil demand growth forecast for this year and 2025, highlighting weakness in China, India, and other regions, marking the producer group’s fourth straight downward revision to its 2024 outlook.
U.S. crude inventories last week rose by 2.1 million barrels. The Energy Information Administration (EIA) said on Thursday, it is much more than analysts’ expectations for a 750,000-barrel rise.
The EIA said gasoline inventories fell by 4.4 million bpd last week, the lowest since November 2022, compared with analysts’ expectations of a 600,000 bpd increase. Distillate inventories, which include diesel and heating oil, also unexpectedly fell by 1.4 million barrels, the data showed.
