On Friday, crude oil prices for the two benchmarks went down due to persistent concerns about slower global demand.
West Texas Intermediate crude oil futures for October 23 declined by -0.75% to $86.22 per barrel. Likewise, Brent contracts fell by -0.60% to $89.38 a barrel on September 08’s Asian afternoon session.
Both hit 10-month highs earlier this week amid threats of possible shortages during the peak winter season. This came after Saudi Arabia and Russia extended their voluntary output slashes at the year’s end.
A higher-than-expected draw in US crude oil storage gave less support to fuel prices. However, they are still on their way towards a 1.00% gain.
According to economists, investors earned from the recent rally fueled by weaker supply. It was boosted by lower production in Saudi and Russia.
They added that the market considered the news about weak volumes. Based on their statements, the commodity needs to show signs of more robust global demand, especially in China.
Besides, the overall deliveries and imports in the Asian nation declined in August. The pressures of sluggish overseas oil demand and lower consumer spending led to this.
On the other hand, China’s crude imports went up by 30.90% last month. The data came after refiners built more inventories and improved processing for higher profits from exporting oil.
Summer Travel Season’s End Weakened Oil
Expectations of lower jet fuel demand as the summer travel season is close to its end brought oil prices lower. Also, ongoing concerns about the uncertain economic outlook in China affected its costs.
Voluntary output cuts with April slashes from OPEC and OPEC+ resulted in an over 5.00% decline in global inventories.
Furthermore, the oil cuts were driven by decreasing travel and aviation demand as the summer holiday approaches Western markets.
According to analysts, the market sentiment is still influenced by Russia and Saudi’s policy decisions. However, investors are struggling to grasp the ideas.
For them, it is unclear whether Saudi’s supply cuts reflect weakness or an effort to increase oil prices.
