Singapore, June 8 (BNA): Oil prices fell today, Thursday, as demand concerns related to the global economic slowdown overshadowed an imminent decline in supplies with Saudi Arabia’s pledge to cut production.
Brent crude futures fell 21 cents, or 0.3%, to $76.74 a barrel at 04:15 GMT, while US West Texas Intermediate crude futures fell 21 cents, or 0.3%, to $72.32 a barrel, according to Reuters.
Both benchmarks settled up about 1% on Wednesday, supported by Saudi Arabia’s plans to make significant production cuts, although price gains were still limited by rising US fuel inventories and weak Chinese export data.
“Oil prices have been trying to recover recently but they have been struggling,” said Yeap Jun Rong, market analyst at IG.
“Tighter supply may continue but the weaker demand outlook is keeping oil prices within their broad range since the start of the year, with immediate resistance at $80 for Brent,” Yip added.
The larger-than-expected build in US fuel inventories reported on Wednesday raised concerns about demand from the world’s largest oil consumer, especially since travel was expected to grow over the Memorial Day weekend.
The Energy Information Administration said on Wednesday that gasoline inventories rose by 2.7 million barrels in the week, above analysts’ expectations for a rise of 880,000 barrels.
Distillate inventories rose by about 5.1 million barrels in the week, exceeding analysts’ expectations for a rise of 1.3 million barrels.
“We considered cutting oil prices significantly in the absence of OPEC+ action last Sunday, but even a cut of 1 million barrels/day seems unlikely to support a sustained price increase,” Citi analysts said on Thursday.
“Both the OPEC and IEA forecasts had an air of wishful thinking about accelerating demand growth by the end of the year,” the analysts added.
Meanwhile, US crude inventories unexpectedly fell by 451,000 barrels for the week, as refiners churned out fuel to the highest level since 2019 over the Memorial Day holiday.
HF