Oil remains under pressure from equity markets and fears of weak demand in China
WTI crude futures fell to $77 a barrel on Thursday, their lowest level since early June, as prevailing negative sentiment in global equity markets weighed on risk assets.
US stocks fell overnight as technology stocks sold off sharply amid disappointing quarterly results.
Oil prices fell on Thursday as demand signals driven by weak consumption in China outweighed the previous day's data showing a big drawdown in U.S. inventories.
Brent crude futures for September fell $1.01, or 1.2%, to $80.70 a barrel by 1117 GMT. US West Texas Intermediate crude oil for September fell by $1.2, or 1%, to $76.67.
Both benchmarks rose on Wednesday, breaking a consecutive session of declines after the Energy Information Administration reported U.S. crude inventories fell more than expected last week to 3.7 million barrels.
US gasoline inventories fell by 5.6 million barrels, while analysts expected a decrease of 400 thousand.
“Despite declines in U.S. crude oil and gasoline inventories, investors remain wary of weakening demand in China, and expectations of progress in ceasefire talks between Israel and Hamas are adding pressure,” said Hiroyuki Kikukawa, president of Nissan Securities-owned NS Trading. .
China's oil imports and refining volumes fell this year compared with 2023 due to weaker fuel demand amid sluggish economic growth, government data showed.
“Growing concerns about the strength of oil demand in the short to medium term have had a strong impact on market sentiment,” said Vandana Hari, founder of oil market research firm Vanda Insight.
In the Middle East, efforts to reach a ceasefire to end the war in the Gaza Strip between Israel and the militant group Hamas have gained momentum over the past month. A breakthrough could ease lingering supply threats and lower prices.
Meanwhile, the US Federal Reserve is expected to cut interest rates only twice this year - in September and December - as robust US consumer demand prompts a cautious approach despite lower inflation, according to a Reuters poll of economists.
Lower interest rates should stimulate economic growth, leading to increased oil consumption.
In Canada, hundreds of wildfires are burning in the western provinces of British Columbia and Alberta, including in the oil sands hub of Fort McMurray.
Brent crude futures fell to $81 a barrel on Thursday, their lowest level since early June, as prevailing negative sentiment in global stock markets weighed on risk assets.
US stocks fell overnight as technology stocks sold off sharply amid disappointing quarterly results.
Concerns about weak demand in China, the world's largest crude oil importer, also persist after the country's economy slowed.
China's economy recently grew 4.7% in the second quarter, its weakest performance since early 2023.
Meanwhile, EIA data showed a decline of 3.74 million barrels last week, the fourth decline in a row and higher than forecasts for a decline of 2.05 million barrels.