Brent crude futures fell 25 cents to $74.05 a barrel and U.S. WTI crude futures shed 4 cents to $69.34
Oil prices dropped on Thursday to six-month lows, as investors worried about sluggish energy demand in the US and China while output from the U.S. remains near record highs.
Brent crude futures fell 25 cents to $74.05 a barrel. U.S. West Texas Intermediate (WTI) crude futures shed 4 cents to $69.34. Both benchmarks posted their lowest prices since late June.
Front-month prices for Brent started trading this week at a discount to prices in a half year for the first time since June, a signal that traders believe the market may have become oversupplied.
With the biggest global importer of oil (China) lowering its demand for crude, pressure remains on prices as the biggest producer, the US, continues with headline output, said PVM Oil analyst John Evans.
U.S. output stayed near record highs of more than 13 million barrels per day, U.S. Energy Information Administration (EIA) data showed on Wednesday.
U.S. gasoline stocks gained 5.4 million barrels last week to 223.6 million barrels, the EIA said, more than quintuple the 1 million barrel build that had been expected.
Concerns about China’s economy also capped oil’s price gains.
Chinese customs data showed that crude oil imports in November dropped 9 per cent from a year earlier as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.
While China’s total imports dropped on a monthly basis, exports grew in November for the first time in six months, suggesting an uptick in global trade flows may be helping the manufacturing sector.
Oil prices have dropped nearly 10 per cent since OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies, announced a combined 2.2 million barrels per day (bpd) in voluntary output cuts for the first quarter of 2024.
The market appears to be suggesting that they do not believe OPEC+ has the ability to follow through on their cuts, said Phil Flynn, an analyst at Price Futures Group in Chicago.
Saudi Arabia and Russia, the two largest oil exporters, on Thursday called for all OPEC+ members to join an agreement on output cuts for the good of the global economy.