HOUSTON: Oil prices edged down on Thursday as an uncertain outlook for demand from China overshadowed the latest US government weekly report showing strong demand for crude.
Brent crude futures fell 19 cents, or 0.2%, to $90.41 a barrel by 11:33 a.m. EDT (1533 GMT), while US West Texas Intermediate crude (WTI) futures fell 17 cents, or 0.2% to $87.36.
US crude oil stockpiles drew down by 6.3 million barrels last week, falling for a fourth consecutive week and down over 6% in the last month, as refineries run at high rates to keep up with global energy demand, Energy Information Administration data showed.
“We’re taking a pause in the rally we’ve been having in West Texas Intermediate,” said Jim Ritterbusch, president of Ritterbusch and Associates. “The EIA report that just came out is supportive.” Both benchmarks briefly erased their losses following the release of the weekly EIA report but then quickly retreated back into negative territory.
Prices had spiked earlier in the week after Saudi Arabia and Russia, the world’s top two oil exporters, extended voluntary supply cuts to the year-end. These were on top of the April cuts agreed by several OPEC+ producers running to the end of 2024.
Market participants also digested mixed data from China. Overall exports fell 8.8% in August year on year and imports contracted 7.3%. But crude imports surged 30.9%.
“The wind has been taken out of the bulls’ sail overnight by rising Chinese product exports last month albeit crude oil imports rose,” PVM Oil analyst Tamas Varga said. Concerns about rising oil output from Iran and Venezuela, which could balance out a portion on cuts from Saudi and Russia, kept a lid on the market as well.
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