Oil prices ease on demand concerns, still headed for weekly gain
2023.09.07 23:44
© Reuters. FILE PHOTO: Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
By Yuka Obayashi
TOKYO (Reuters) – Oil prices fell for a second session on Friday, weighed down by lingering concerns over slower global demand, but were still headed for a second consecutive weekly gain amid expectations of tightening supplies.
futures slid 33 cents, or 0.4%, to $89.59 a barrel by 0050 GMT, while U.S. West Texas Intermediate crude (WTI) futures declined 33 cents, or 0.4%, to $86.54.
Both benchmarks reached 10-month highs earlier this week on fears of potential shortages during the peak winter demand season after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.
For the week, Brent and WTI were still on track for about a 1% gain.
“Investors took profits after the recent rally which was driven by concerns over tighter supply following extended production cuts in Saudi Arabia and Russia,” said Tatsufumi Okoshi, senior economist at Nomura Securities.
“The market has factored in the news of lower supply and it would need clear signs of stronger global demand, especially in China, to move higher,” he said, noting investors’ consensus is that Beijing’s stimulus has so far failed to boost to its economy.
China’s overall exports and imports fell in August, data showed on Thursday, as the twin pressures of sagging overseas demand and weak consumer spending squeezed businesses in the world’s second-largest economy. But China’s crude imports surged 30.9% last month as refiners built inventories and increased processing to benefit from higher profits from exporting fuel.
A bigger-than-expected draw in {{8849|U.S. crcrude oil inventories lent muted support to oil prices.
U.S. crude oil stockpiles fell for the fourth consecutive week, with inventories down more than 6% in the last month, as oil refiners run at high rates to keep up with global energy demand, Energy Information Administration data showed on Thursday.
Crude inventories fell by 6.3 million barrels, triple the 2.1 million-barrel drop that analysts expected.
