Oil prices soared on Friday but were expected to post their fourth straight weekly fall as concerns over global demand persisted, offsetting prospects of supply disruptions.
Brent crude oil futures for October delivery rose 0.93% to $80.26 per barrel, while the US West Texas Intermediate crude futures (WTI) for September delivery advanced 0.96% to $77.04 per barrel.
The global and US benchmarks have lost around 7.3% in the past four weeks, the longest run of successive weekly declines this year. On a weekly basis, Brent is set to drop 1.7%, and WTI is on track for a 1.1% slide.
Markets also remained wary amid tensions in the Middle East, as fears of a full-blown war in the region following the death of senior Hezbollah commander Fuad Shukr and Hamas’ top political leader Ismail Haniyeh increased worries over supplies in the oil-rich region.
Weak China Economy, Asia Imports Raise Oil Demand Concerns
China continued to pressure prices, with data from the National Bureau of Statistics (NBS) showing on Wednesday that the country’s manufacturing purchasing managers’ index (PMI) contracted to 49.4 in July, slightly stumbling 0.1 from the previous month’s reading of 49.5.
The result added to demand growth uncertainty in the world’s largest oil importer after refinery activity slowed further by 3.7% year-over-year (YoY) to 14.25 million barrels per day (bpd) in June, and crude imports slipped 2.3% from the year prior.
Weakening oil demand in China also partly contributed to Asia’s imports hitting a two-year low in July, with softening demand for the second-largest importer, India, being another factor.
A survey from LSEG Oil Research showed that crude delivered in the top oil-importing region fell 6.1% from June to 24.88 million bpd last month, the lowest daily level since July 2022.
Asia’s imports totaled 26.78 million bpd in the first seven months of 2024, down 340,000 bpd from the same period a year earlier.
The data weakens the Organization of Petroleum Exporting Countries’ (OPEC) expectations for strong demand in the region.
OPEC kept projections of global oil demand rising 2.25 million bpd this year, with China seen heading the surge at 760,000 bpd, followed by India with a 230,000 bpd gain and a 350,000 bpd addition for the remainder of Asia.
On the other hand, the International Energy Agency (IEA) estimated that oil demand worldwide will grow 970,000 bpd, expecting China to represent around 40% or 388,000 bpd of the global increase.
