By Adedapo Adesanya
Prices of the crude oil grades dropped to their lowest in 14 months on Thursday, fueled by worries about demand in the US and China and a likely rise in Libyan supplies despite supporting factors.
During the session, Brent futures were down 1 cent to $72.69 a barrel and the US West Texas Intermediate (WTI) futures depleted by 5 cents or 0.1 per cent to $69.15 per barrel.
The price of Brent yesterday was the lowest since June 2023 and since December 2023 for WTI.
The US Energy Information Administration (EIA) reported an estimated inventory decline of 6.9 million barrels for the week to August 30.
A day earlier, the American Petroleum Institute reported (API) in its inventory estimate that these dropped by a sizable 7.4 million barrels in the final week of August.
The EIA’s previous report pegged the decline in oil inventories at a modest 800,000 barrels, with mixed changes in fuel inventories.
The Organisation of the Petroleum Exporting Countries and its allies, OPEC+ will likely delay its partial reversal of production after the expectation of a reversal has weighed on oil prices for weeks even with no indication from OPEC it was going ahead with that.
Reuters reported that OPEC+ agreed to delay a planned oil output increase for October and November citing sources, and said it could further pause or reverse the hikes if needed.
Market analysts noted that the OPEC+ decision has the effect of tightening fourth-quarter balances by about 100,000-200,000 barrels per day and should be sufficient to prevent material builds even if demand from China does not improve.
In Libya, some tankers were being allowed to load crude from the OPEC member’s storage even though output remained curtailed amid a political standoff over the leadership of the country’s central bank and oil revenue.
Economic data in the US offered some relief about the health of the economy to a market looking for clues about the path of the Federal Reserve interest rate cuts.
For instance, US services sector activity was steady in August, but employment gains slowed, remaining consistent with an easing labour market while the number of Americans filing new applications for jobless benefits declined last week as layoffs remained low.
Meanwhile, US private job growth hit a three-year low in August and data for the prior month was revised lower, potentially hinting at a sharp labour market slowdown.
