Oil prices steady as markets weigh smaller US inventory draw, Libya risks
2024.08.28 21:55
Investing.com– Oil prices steadied in early Asian trade on Thursday after a smaller than expected draw in U.S. inventories brewed concerns over cooling demand, although the prospect of extended supply disruptions in Libya kept losses limited.
Crude markets were nursing two straight days of losses, having mostly reversed a recent rebound amid persistent concerns that slowing growth in the U.S. and China will dent demand in the coming months.
Production disruptions in Libya kept traders attaching some risk premium to crude, as did signs of a sustained conflict in the Middle East.
expiring in October fell slightly to $78.62 a barrel, while steadied at $74.57 a barrel by 20:54 ET (00:54 GMT).
US inventories fall by less than expected as summer demand cools
U.S. saw a smaller than expected draw of 0.85 million barrels in the week to August 23, data from the Energy Information Administration showed on Wednesday.
inventories saw a bigger-than-expected draw, but saw an unexpected build.
The mixed inventory readings ramped up concerns that U.S. oil demand will cool as the travel-heavy summer season comes to a close. Fears that a slowing U.S. economy will weigh on demand also remained in play, following a string of weak readings on the labor market in recent weeks.
Focus is now on second-quarter U.S. data, due later on Thursday, for more cues on the world’s biggest economy.
data- the Federal Reserve’s preferred inflation gauge- is also due on Friday, amid growing optimism over interest rate cuts.
Libya supply risks persist, stem crude losses
But bigger losses in oil were held back by some elements of risk premium, after Libya halted production at most of its major oilfields this week amid a growing row over the country’s central bank.
The Central Bank of Libya is the only internationally recognized depository for payments for Libya’s oil exports, and is controlled by the internationally recognized government in the western side of the country.
But the eastern side, which holds most of the country’s oilfields and is controlled by separate leadership, recently called for a change in the central bank’s leadership, and shut down all oil production.
Libya produced about 1.2 million barrels per day in July, with any extended shutdowns in production heralding a global oil supply shortfall.
