Oil prices continued to decline for the fourth week in a row. Prices slightly changed in early Asian trading following a 5 percent fall to their lowest level in four months on Thursday. That is mainly due to concerns about global demand.
Brent and Texas crude lose a sixth of their value
By 02:32 GMT, Brent crude futures rose ten cents, a 0.1 percent increase reaching $77.52 per barrel. Meanwhile, West Texas Intermediate crude settled at approximately $72.95 per barrel. Both indices lost about one-sixth of their value over the past four weeks.
“There was little in the way of fresh fundamental developments behind the move. Instead, a break below US$80/bbl appears to have brought a fair amount of technical selling,” ING said in a research note on Friday.
OPEC and the International Energy Agency have both predicted supply tightness in the fourth quarter. However, some key economic data from around the world this week showed demand was bleaker than forecast.
Increasing U.S. inventories reduces oil prices
The decline in oil prices this week was mainly due to the sharp rise in U.S. crude inventories. Moreover, production continued at record levels. Thus, analysts believe this raised fears of weak demand in the world’s largest oil consumer amid rising production.
For its part, J.P. Morgan commodities research said on Friday that its global oil demand tracker showed demand averaged 101.6 million barrels a day in the first half of November. That is 200,000 barrels a day lower than its projection for the month.
Analysts believe that recent drops in prices are also likely to push Saudi Arabia to extend oil output cuts into 2024.
“There will be growing noise around OPEC policy in the coming weeks with the group set to meet in Vienna on 26 November,” ING said.
The US Energy Information Administration stated earlier that “crude oil inventories in the United States rose by 3.6 million barrels last week to 421.9 million, far exceeding the expectations of analysts polled by Reuters, who estimated the expected increase at 1.8 million barrels.”
The data showed that US domestic crude production remained at a record high of 13.2 million barrels per day.
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