This week’s supply report from the U.S. EIA on Wednesday showed gasoline stockpiles dropped less than predicted while distillate stockpiles increased against expectations of a drop, reflecting signs of slowing demand
Oil steadied on Thursday after settling lower the previous day as signs of retreating fuel demand in the U.S., the world’s largest oil user, contended with risk of a widening conflict in the Middle East.
This week’s supply report from the U.S. Energy Information Administration (EIA) on Wednesday showed gasoline stockpiles dropped less than predicted while distillate stockpiles increased against expectations of a drop, reflecting signs of slowing demand.
It does not exactly give a healthy state of domestic demand in the U.S., according to John Evans of oil broker PVM, who added that U.S. economic data out later in the day would be important for sentiment. Oil prices today will not be in the hands of the oil market, he added.
Brent crude futures dropped 4 cents, or 0.1 per cent, to $87.98 a barrel by 1005 GMT while U.S. West Texas Intermediate (WTI) crude futures were down 7 cents, or 0.1 per cent, at $82.74.
U.S. crude inventories unexpectedly dropped sharply last week, the Energy Information Administration report also showed, as exports climbed.
The concern about U.S. fuel demand arises amid signs of cooling U.S. business activity in April and as stronger than expected inflation and employment data means the Federal Reserve is seen as more likely to delay expected interest rate cuts.
U.S. economic data out later on Thursday includes first quarter economic growth.
The current weakness in benchmark prices, after testing above $90 levels, is due to market sentiment refocusing on global economic headwinds over geopolitical tensions, according to Emril Jamil, senior oil analyst at LSEG Oil Research.
