Oil prices ease on concerns over weak China demand, Mideast ceasefire talks
2024.07.24 21:56
By Yuka Obayashi
TOKYO (Reuters) – Oil prices eased on Thursday as concerns over weak demand in China, the world’s largest crude importer, and expectations of a nearing ceasefire deal in the Middle East overcame gains in the previous session after draws in U.S. inventories.
futures for September fell 38 cents, or 0.5%, to $81.33 a barrel by 0129 GMT. U.S. West Texas Intermediate crude for September slid 33 cents, or 0.4%, to $77.26 per barrel.
Benchmarks settled higher on Wednesday, snapping three straight sessions of declines after the Energy Information Administration said inventories fell by 3.7 million barrels last week. That compared with analysts’ expectations in a Reuters poll for a 1.6-million-barrel draw. [EIA/S]
U.S. gasoline stocks dropped by 5.6 million barrels, compared with analysts’ expectations for a 400,000 draw. Distillate stockpiles fell by 2.8 million barrels versus expectations for a 250,000-barrel increase, the EIA data showed.
“Despite draws in U.S. crude and gasoline stocks, investors remained wary about weakening demand in China and expectations of advancing ceasefire talks between Israel and Hamas added to pressure,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan (OTC:) Securities.
This year, China’s oil imports and refinery runs have trended lower than in 2023 on lower fuel demand amid sluggish economic growth, according to government data.
Slumping U.S. stock markets also reduced traders’ risk appetite, Kikukawa added. All three main indexes on Wall Street ended lower on Wednesday.
In the Middle East, efforts to reach a ceasefire deal to end the war in the Gaza Strip between Israel and militant group Hamas under a plan outlined by U.S. President Joe Biden in May and mediated by Egypt and Qatar have gained momentum over the past month.
On Wednesday, Israeli Prime Minister Benjamin Netanyahu sketched a vague outline of a plan for a “deradicalized” post-war Gaza in a speech to U.S. Congress and touted a potential future alliance between Israel and America’s Arab allies.
“If Middle East ceasefire talks progresses, U.S. equities continue to slide, and China’s economy remains sluggish, oil prices could fall to early June levels,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
