Oil prices catch breath after days of losses
4:28 am Wednesday, August 21st, 2024
By Paul Carsten
LONDON (Reuters) -Oil prices held broadly steady on Wednesday after a run of declines that have pushed Brent down to almost $77, driven by stubborn fears over Chinese demand and diminishing concerns about conflict spreading in the Middle East.
Brent crude futures were stable at $77.20 a barrel by 0806 GMT. U.S. West Texas Intermediate crude was at $73.10, down 7 cents.
Since peaking above $82 on Monday last week, Brent had shed 6.2% of its value by the end of trading on Tuesday, closing at a two-week low of $77.20. WTI fell 7.5% in the same period.
Worries over demand from China, the world’s biggest crude importer, and the dialling back of alarm over war in the Middle East expanding to threaten crude supply, drove those declines.
U.S. crude oil stocks were seen rising last week, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline and distillate stocks fell, however, according to the sources.
The United States is the world’s biggest producer and consumer of oil, and growing inventories point to oversupply that could pressure prices.
Official U.S. government inventory estimates are set to be released on Wednesday at 10:30 a.m. (1430 GMT).
Meanwhile, U.S. Secretary of State Antony Blinken wrapped up a trip to the Middle East intended to help broker a ceasefire agreement in Gaza.
Blinken and mediators from Egypt and Qatar have raised hopes for a U.S. “bridging proposal,” which could shrink the gaps between the two sides in the 10-month-old war.
“Hopes of a cease-fire between Israel and Hamas have weighed on oil, along with lingering demand concerns,” ING commodities strategists said.
“While weaker Chinese demand has been well reported, refinery margins around the globe have been under pressure for much of August, suggesting that these demand concerns are not isolated to just China,” they said.
The economic struggles in top crude importer China have continued to hobble the market, as weak processing margins and low fuel demand curbed operations at state-run and independent refineries.
Imports of crude oil from top supplier Russia fell in July by 7.4% from a year ago, while fuel oil imports retreated for a third straight month, customs data showed this week.
(Reporting by Paul Carsten in London, Laila Kearney in New York and Jeslyn Lerh in Singapore;Editing by Shri Navaratnam, Kim Coghill and Sharon Singleton)
