China Jitters and Mideast Peace Talks Sink Oil Prices

25 Jul 2024 , 09:38 AM

Oil prices fell on Thursday, as fears about poor demand in China, the world’s largest crude importer, and prospects of a near-term ceasefire deal in the Middle East outweighed gains in the previous session as U.S. inventories fell.

Brent crude futures for September slipped 38 cents, or 0.5%, to $81.33 a barrel. U.S. West Texas Intermediate crude for September fell 33 cents, or 0.4%, to $77.26 per barrel.

Benchmarks rose on Wednesday, halting a three-day losing streak after the Energy Information Administration reported a 3.7 million barrel drop in US oil stocks the previous week. In a Reuters survey, economists expected a draw of 1.6 million barrels.

U.S. petrol inventories fell by 5.6 million barrels, contrary to economists’ forecasts of a 400,000 decline. The EIA said that distillate stockpiles declined by 2.8 million barrels, compared to estimates of a 250,000-barrel increase.

According to government data, China’s oil imports and refinery runs are expected to be lower this year than in 2023 due to weaker gasoline demand and sluggish economic development.

News reports stated that the slumping US stock markets lowered traders’ risk appetite. All three major Wall Street indices closed lower on Wednesday.

In the Middle East, efforts to establish a cease-fire agreement between Israel and militant group Hamas under a proposal announced by US President Joe Biden in May and brokered by Egypt and Qatar have gathered traction during the last month.

In a speech to the United States Congress on Wednesday, Israeli Prime Minister Benjamin Netanyahu outlined a vague plan for a “deradicalized” post-war Gaza and promoted a potential future partnership between Israel and America’s Arab friends.

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