Oil prices fell on Monday, reversing Friday’s rise as concerns about reduced demand in the United States and China negatively affected market confidence.
January Brent crude futures were down 71 cents, or 0.87%, at $80.72 a barrel at 04:00 GMT, while West Texas Intermediate (WTI) crude futures for December were at $76.49, down 68 cents, or 0.88%.
Both indicators were well below the 100-day moving average of $86.61 per barrel for Brent and $82.31 per barrel for WTI.
Prices rose nearly 2% last Friday as Iraq announced support for OPEC+ oil cuts, but fell nearly 4% for the week, logging their third weekly loss since May.
Concerns about potential supply disruptions from the Israel-Hamas conflict have eased somewhat as investors focus more on low demand in the United States and China.
The US Energy Information Administration (EIA) said last week that crude oil production in the US this year will increase slightly less than previously expected, while demand will decrease.
It has been stated that per capita gasoline consumption in the USA may drop to the lowest level in the last twenty years next year.
Weak economic data from China, the world’s largest crude oil importer, last week also increased fears that demand will decrease. China’s consumer prices fell to pandemic-era lows in October, raising doubts about the strength of the country’s economic recovery.
Additionally, refiners in China requested less supply from Saudi Arabia, the world’s largest exporter, for December.
WTI is likely to support oil prices if it approaches $75 per barrel. If the market falls further, support buying would likely occur if Saudi Arabia and Russia decide to continue their voluntary supply cuts beyond December.
Leading oil exporters Saudi Arabia and Russia confirmed last week that they would continue additional voluntary oil production cuts through the end of the year as concerns about demand and economic growth continue to negatively impact crude oil markets.
The Organization of Petroleum Exporting Countries and its allies, including Russia, and OPEC+, will meet on November 26.
On the supply side, Baker Hughes said U.S. energy firms reduced the number of oil rigs operating for the second week in a row to its lowest level since January 2022. The rig counts indicate the direction of future supply expectations.