The Brent crude oil benchmark hovered above $80 a barrel on Thursday, after demand concerns and a fading war-risk premium triggered a selloff this week.
Brent crude futures were up $1.13, or about 1.4%, at $80.67 a barrel by 1617 GMT. US WTI crude futures rose $1.03, also about 1.38%, to $76.36. Both benchmarks dropped to their lowest since mid-July on Wednesday as concern over supply disruptions in the Middle East eased and expectations US and Chinese demand will weaken intensified.
Thursday’s gains were signs the markets were re-orienting to fundamental supply-demand issues, Phil Flynn, analyst at Price Futures Group, said.
“I think we’re seeing the market saying the sell-off was overdone,” Flynn said.
Brent is nearly $20 a barrel lower than its September peak. Data from China on Thursday showed policymakers struggling to control disinflation, casting doubt over the chances of a broad-based economic recovery in the world’s biggest commodity consumer.
Demand indicators also imply weakness in the United States. US crude oil inventories increased by 11.9 million barrels over the week to Nov 3, sources said, citing American Petroleum Institute figures.
If confirmed, this would represent the biggest weekly build since February. The US EIA, however, has delayed release of weekly oil inventory data until Nov 15 for a system upgrade.
Published in The Express Tribune, November 10th2023.
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