Oil prices fell for the fifth straight session on Thursday as market anxieties about global demand outlook overshadowed a drop in U.S. fuel inventories. Brent crude futures decreased by 10 cents to $75.95 per barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 23 cents to $71.70 as of 0639 GMT.
The October WTI contract has dropped 6.9% since August 15, and Brent futures have declined 6.4% over the same timeframe. This decline follows revised U.S. employment data showing fewer jobs added in 2024 than previously reported, coupled with weak economic data from China, the world’s second-largest economy and top oil importer.
Market participants are concerned that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, might increase output in October, potentially adding more supply to the market. Priyanka Sachdeva, a senior market analyst at Phillip Nova, noted that “weak global demand and the potential threat of OPEC+ rolling back on their production cuts are weighing on oil,” while geopolitical tensions and the ongoing Middle East conflict present additional uncertainties.
Despite a U.S. government report indicating a decrease in crude, gasoline, and distillate inventories for the week ending August 16, along with increased refinery runs, oil prices have continued to slip. Analysts from Citi observed that “weak Chinese oil import data and subdued middle distillate demand in the U.S. have reduced the geopolitical risk premium for oil.”
Concerns about the potential impact of OPEC+ production decisions on fourth-quarter prices have further exacerbated market weakness. ING analysts suggest that if OPEC+ fails to adjust their supply plans, prices could face additional downward pressure.
Recent easing of tensions in the Israel-Gaza conflict and U.S. diplomatic efforts to secure a ceasefire have also impacted the market. “Upside catalysts for oil may seem limited for now,” said IG market strategist Yeap Jun Rong, citing reduced geopolitical risks and uncertain U.S. oil demand.
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