Oil prices steadied on Thursday following a two-day decline. Concerns about rising tension in the Middle East conflict have overshadowed data from China showing a decline in crude consumption. Brent traded near $80 a barrel after sinking by 3.1% over the previous two sessions, while U.S. benchmark West Texas Intermediate hovered above $77 per barrel.
Chinese oil demand fell by 8% in July compared to the previous year, with the figure negatively affected by a rising demand for cleaner fuels as the clean energy transition continues. As a result of such trends, OPEC lowered its global demand forecast for 2024 in its monthly report released earlier in the week.
While a report from the American Petroleum Institute suggested a notable drop in U.S. crude stockpiles, official U.S. data showed that stockpiles rose by 1.36 million barrels last week. “Current market fundamentals suggest that OPEC+ is unlikely to increase production in the fourth quarter,” SEB AB commodities analyst Ole Hvalbye observed, explaining that the peak demand period for the northern hemisphere is nearing its end. Furthermore, an OPEC supply increase in October could lead to an oversupply, pushing prices downward.