Oil prices fell on Thursday, pressured by concerns over softening US demand and broad oversupply that offset threats to output from conflict in the Middle East and the Russian war in Ukraine.
Brent crude futures were down US$1.13, or 1.7%, at US$66.36 a barrel by 1319 GMT while US West Texas Intermediate crude futures lost US$1.16, or 1.8%, to US$62.51.
“Oil prices are falling today in response to bearish IEA headlines, which suggest massive oversupply on the oil market next year,” said Commerzbank analyst Carsten Fritsch.
However, the Opec report published after the IEA’s kept non-Opec supply and demand forecasts for the year unchanged, citing steady demand.
The Organization of the Petroleum Exporting Countries and allies, a group collectively known as Opec+, on Sunday decided to raise production from October.
The market was torn between perceived supply shortage due to a rise in tensions in the Middle East and Ukraine and actual oversupply from higher Opec+ production and swelling stocks, said PVM Oil Associates analyst Tamas Varga.
Saudi Arabia’s crude oil exports to China are set to surge in October, several trade sources told Reuters on Thursday, with Aramco shipping about 1.65 million barrels per day in October, compared with 1.43 million bpd allocated in September.
In the US, crude inventories rose by 3.9 million barrels in the week to Sept 5, the Energy Information Administration said, against expectations of a draw of one million barrels.
The market was also questioning how long China could continue to absorb barrels and keep OECD inventories low, said UBS analyst Giovanni Staunovo, adding that investors were also watching for further sanctions affecting Russian oil.
Source: Theedgemalaysia