Crude oil prices edged lower on Thursday, pulling back from the previous session’s multi-month highs, as investors booked profits amid ongoing demand uncertainty.
Brent crude futures fell 40 cents, or 0.46%, to $86.94 per barrel, while U.S. West Texas Intermediate (WTI) crude futures declined 44 cents, or 0.52%, to $83.44. The price declines came after both benchmarks had settled at their highest levels in months on Wednesday.
Wednesday’s gains were fueled by a larger-than-expected 12.2 million barrel draw in U.S. crude inventories reported by the Energy Information Administration (EIA). Analysts had expected a much smaller 680,000 barrel decline.
However, the positive inventory data was offset by concerns about weakening demand. German industrial orders unexpectedly fell in May, signaling continued challenges for Europe’s largest economy. U.S. data also showed a rise in first-time jobless claims, adding to demand worries.
Despite the pullback, analysts expect the downward pressure on oil prices to be short-lived. PVM’s Tamas Varga noted that the current dollar weakness and improved U.S. fuel demand outlook should provide support.
Swiss bank UBS even forecasts Brent crude reaching $90 per barrel this quarter, citing OPEC+ production cuts and projected inventory declines. The softer economic data has also increased the probability of a September interest rate cut by the U.S. Federal Reserve, which could be bullish for oil.
Overall, the market remains balanced between concerns about demand and tightening supply, leading to the volatile price swings seen in recent sessions.