Oil prices fell for a fifth session on Thursday as investors fretted about the outlook for global demand despite falling US fuel inventories.
Brent crude futures fell 10 cents to $75.95 a barrel, while WTI crude futures were down 23 cents at $71.70 at 0639 GMT.
On Wednesday, revised employment statistics from the United States, the world’s largest oil consumer, showed fewer jobs added in 2024 than previously reported, and weak economic data from China, the world’s second-largest economy and largest oil importer, last week also contributed to the decline in prices.
Investors also expect OPEC+ allies, including Russia, to lift some voluntary production cuts in October to provide more supply.
Weak global demand and the potential threat that OPEC+ will reverse production cuts are weighing on oil, and it’s important to note that conflict in the Middle East and geopolitical tensions elsewhere are tilting the risk to the upside.
Concerns about how OPEC+ output will fare in the fourth quarter if the cuts are lifted have added to the price weakness, but they could be halted or reversed if necessary.
Meanwhile, downward pressure on prices makes it increasingly likely that OPEC+ will scrap plans to gradually increase supply from October. Failing to do so would put further pressure on prices.
Crude prices fell despite a U.S. government report on Wednesday showing that U.S. crude, gasoline, and distillate inventories fell in the week ending Aug. 16, while refinery activity also increased.
Despite stockpiles of crude and other key products, weak Chinese oil import data and lower U.S. middle distillate demand helped reduce the geopolitical risk premium for the oil complex.
Concerns about the Israel-Gaza war eased last week as the U.S., Israel, and Hamas tried to reach a ceasefire deal, but the effort ended without a truce.
With the prospect of a ceasefire in the Middle East increasing, the bullish catalysts for oil appear limited for now, with market participants pricing in some geopolitical risks.
While economic conditions in the U.S. support the upcoming policy easing, they do not yet provide much assurance of a stronger oil demand outlook.
