Oil prices steadied on Thursday, supported by a drop in U.S. fuel inventories that limited further declines after four consecutive days of decreases driven by concerns about global demand. Brent crude futures rose by 29 cents (0.4%) to $76.34 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by 43 cents (0.6%) to $72.36.
Analysts attribute the stabilization to a U.S. government report indicating a decrease in crude, gasoline, and distillate inventories for the week ending August 16, coupled with increased refinery runs. Despite this, macroeconomic factors, particularly worries about China’s economic slowdown, continue to exert downward pressure on prices.
The United States remains the largest global oil consumer, while China is the largest importer. Recent revisions to U.S. jobs data and weak economic indicators from China have raised concerns about future oil demand growth. Analysts suggest that demand growth may be at the lower end of expectations due to potential weaknesses in both economies.
Investors are also closely watching the actions of OPEC+ regarding their plans to gradually unwind output cuts starting in October. Analysts from ING indicated that the current downward pressure on prices might compel OPEC+ to reconsider these plans, as failing to adjust could lead to further price declines.
Additionally, easing tensions in the Israel-Gaza conflict have contributed to a more stable supply outlook, although recent U.S. diplomatic efforts have not yet resulted in a ceasefire.