Oil prices fell on Thursday as China’s new COVID-19 lockdown measures added to concerns that high inflation and interest rate hikes are taking a toll on fuel demand.
* Brent crude futures were down $2.10, or 2.2%, at $93.54 a barrel by 1013 GMT. US West Texas Intermediate (WTI) crude futures were down $1.86, or 2.1%, at $87.69 a barrel.
* “Demand for oil in the Western world, as well as in China, is stagnant, while supply is increasingly expanding, largely thanks to the US shale oil boom,” said the Julius analyst Baer Norbert Rucker.
* Asia’s factory activity slumped in August as China’s COVID restrictions and cost pressure continued to hurt businesses, surveys showed on Thursday, casting a shadow over prospects for a fragile recovery in the economy. region.
* South China’s tech hub Shenzhen tightened COVID-19 restrictions amid a surge in cases, and major events and indoor shows were suspended for three days in the city’s most populous district, Baoan.
* On Thursday, Europe’s main stock index fell to a seven-week low on growing concerns about aggressive interest rate hikes and record inflation in the region.
* A possible revival of the 2015 Iran nuclear deal, which would allow the OPEC member to boost its oil exports, also weighed on prices. French President Emmanuel Macron said on Thursday that he expects a deal to be finalized in the coming days.
* The recent volatility in the oil market is due to concerns about insufficient supply in the months after Russia sent military forces to Ukraine and OPEC’s efforts to increase production.
* OPEC production reached 29.6 million barrels per day (bpd) in the most recent month, according to a GLM study, while US output rose to 11.82 million bpd in June. Both are at their highest levels since April 2020.
* Still, the oil market will have a small surplus of just 400,000 bpd in 2022, far less than previously forecast, according to OPEC and its partners – known as OPEC+ – due to underproduction by its members, data from the group showed. The group expects an oil market deficit of 300,000 bpd in 2023.
* For its part, crude oil stocks in the United States fell by 3.3 million barrels, the US Energy Information Administration reported on Wednesday, while those of gasoline fell by 1.2 million barrels.
* Finance ministers from the Group of Seven richest countries in the world will discuss the US government’s proposal to limit the price of Russian oil when they meet on Friday, the White House said.