Oil prices fell on Thursday as concerns about decreasing demand due to the global economic slowdown outweighed Saudi Arabia’s output curbs.
Brent crude prices declined 6 cents, or 0.1%, to $76.89 a barrel at 0640 GMT, while WTI futures fell 6 cents to $72.49.
Saudi Arabia’s promises for major output cutbacks lifted both benchmarks by nearly 1% on Wednesday, but surging U.S. gasoline inventories and dismal Chinese economic data limited gains.
“Oil prices have been attempting to recover lately but it has been a struggle,” said IG market strategist Yeap Jun Rong.
“A tighter supply but weaker demand outlook could continue to keep oil prices within its wide-ranging pattern since the start of the year, with immediate resistance at the $80 level for Brent crude,” Yeap said.
On Wednesday, U.S. petroleum stocks rose more than expected, raising concerns about demand from the world’s largest oil user. Memorial Day weekend travel was expected to increase.
The EIA said Wednesday that gasoline stockpiles rose 2.7 million barrels last week, exceeding analyst projections of 880,000.
In the week, distillate stocks surged over 5.1 million barrels, beating economists’ forecasts of 1.3 million.
“We considered substantially lowering our oil price deck in the absence of OPEC+ action last Sunday, but even a 1 million barrel/day cut looks unlikely to underpin a sustainable price increase,” Citi analysts said Thursday.
“Both OPEC and IEA forecasts have had an air of wishful thinking about accelerating demand growth by year-end,” experts said.
During the Memorial Day vacation, refiners produced the most fuel since 2019, and U.S. crude stockpiles unexpectedly decreased by 451,000 barrels.
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