Oil prices fell on Thursday, weighed down by persistent worries about the demand outlook in top crude importer China. Meanwhile, investors were also awaiting upcoming U.S. economic data for further cues on the health of the world’s largest economy.
Brent crude futures for September delivery slipped 0.5 percent to $81.26 per barrel, while West Texas Intermediate (WTI) crude futures dropped 0.6 percent to $76.24 per barrel.
The downbeat sentiment came despite data showing a drop in U.S. crude inventories, which offered only limited support to oil markets. Concerns over potential supply disruptions due to wildfires in Canada’s Alberta province also provided fleeting support.
However, broader fears of waning oil demand, coupled with forecasts of a potential market surplus in 2025, kept traders largely bearish on crude. A broader rout in commodity prices also limited buying interest in oil.
Upcoming U.S. economic data in focus
Investors were focused on the upcoming release of U.S. gross domestic product (GDP) data, which is due later on Thursday. The reading will be closely watched for any further signs that the world’s largest economy is slowing, which could have negative implications for crude demand.
Additionally, the personal consumption expenditures (PCE) price index data – the Federal Reserve’s preferred inflation gauge – is scheduled for Friday. This will likely factor into the central bank’s outlook on interest rates ahead of its policy meeting next week, where it is widely expected to keep rates unchanged.
Lingering concerns over China demand
Sentiment remained constrained by ongoing worries over the demand outlook in China, the world’s biggest oil importer. This comes after the country reported disappointing economic growth figures for the second quarter, and its crude imports sank in June.
The lack of clear signals from Beijing on additional stimulus measures further dampened the outlook for Chinese oil demand. An unexpected interest rate cut by the People’s Bank of China did little to improve the overall sentiment.
Uncertainty over the U.S. presidential race
Uncertainty over the U.S. presidential race also weighed on sentiment towards China, as investors grappled with the potential implications of a change in the U.S. administration’s stance towards Beijing.
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