Oil prices slide

27 Jun 2024 , 09:15 AM

Oil prices fell in early Asian trade on Thursday as a surprising boost in U.S. stocks fueled concerns about weak demand from the world’s largest oil user, while concerns about a potential escalation of the Gaza war disrupting Middle Eastern supplies limited losses.

Brent crude oil futures declined 30 cents, or 0.4%, to $84.17 a barrel. U.S. West Texas Intermediate crude futures fell 32 cents, or 0.4%, to $80.58 a barrel.

Both benchmarks closed marginally higher on Wednesday.

The United States Energy Information Administration (EIA) reported a 3.6 million barrel increase in crude oil stocks last week, surprise Reuters analysts who predicted a 2.9 million-barrel decrease.

U.S. petrol stockpiles also increased by 2.7 million barrels, contrasting to economists’ estimates of a 1 million-barrel drop.

Last week, product supply for motor petrol, a proxy for demand, declined by approximately 417,000 barrels per day to 8.97 million bpd. The four-week average for demand is around 2% lower than last year’s levels.

Ueno said merchants were concerned about sluggish consumption despite the prime summer driving season in the United States.

Cross-border tensions between Israel and Lebanon’s Hezbollah have risen in recent weeks, raising worries of a full-fledged Israel-Hezbollah war that might involve other regional nations, notably major oil producer Iran.

Turkish President Recep Tayyip Erdogan expressed sympathy with Lebanon and urged regional countries to lend their help.

Meanwhile, Israeli soldiers blasted various parts of Gaza on Wednesday, and residents in Rafah, the Palestinian enclave’s south, reported violent fighting overnight.

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