Oil prices fell on Thursday, after concerns about weak demand in China, the world's largest crude importer, and expectations that a ceasefire agreement in the Middle East would soon be reached, erased the gains witnessed in the previous session after a decline in US inventories.
Brent crude futures for September delivery fell 38 cents, or 0.5 percent, to $81.33 a barrel by 0129 GMT, and US West Texas Intermediate crude futures fell 33 cents, or 0.4 percent, to $77.26 a barrel.
Oil prices rose on Wednesday after the US Energy Information Administration said that US crude inventories fell by 3.7 million barrels last week, compared to the expectations of analysts polled by Reuters for a decline of only 1.6 million barrels.
Gasoline stocks in the United States fell by 5.6 million barrels, compared to analysts’ expectations of a decline of 400 thousand barrels. Energy Information Administration data showed that distillate stocks fell by 2.8 million barrels, compared to expectations that they would rise by 250,000 barrels.
Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, said: “Despite the decline in crude and gasoline inventories in the United States, investors remained cautious about weak demand in China, and expectations of progress in ceasefire talks between Israel and Hamas added to the pressure.” ".
According to Chinese government data, oil imports and the quantities of crude consumed in refineries this year are trending to decline compared to 2023 due to a decrease in demand for fuel amid slowing economic growth.
In the Middle East, efforts aimed at reaching a ceasefire agreement to end the war in the Gaza Strip between Israel and the Hamas movement under a plan framed by US President Joe Biden in May and mediated by Egypt and Qatar have gained momentum during the recent period.
“If ceasefire talks in the Middle East progress and US stocks continue to decline and the Chinese economy remains sluggish, oil prices may fall to early June levels,” said Satoru Yoshida, a commodities analyst at Rakuten Securities.
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