Benchmark US crude fell early Thursday to the lowest level in months, falling below $90 a barrel for the first time since Russia invaded Ukraine in late February.
By 10:30 a.m. ET Thursday, U.S. benchmark WTI Crude had fallen 1.16% on the day and was trading at $89.58. International benchmark Brent crude also fell, trading below $100 a barrel for a second straight day amid a global economic slowdown and fears of a recession, which could dampen demand growth this year in compared to last year. Brent had fallen 1.44% to $95.36 by 10:30 a.m.
Also, the tightness in physical crude oil markets appears to have eased in recent days, with spot deliveries trading at smaller premiums.
Oil prices fell 4% on Wednesday, to levels seen just before Russia’s invasion of Ukraine, after the US Energy Information Administration reported a large build-up in crude stockpiles of 4.5 million barrels for the week to July 29.
“The main bearish signal for crude appears to come from Energy Information Administration data showing an unexpected and sizable build in US commercial crude inventories and a drop in gasoline demand in the week ending 29 of July,” Vanda Insights said early Thursday during Asian trade. .
US inventory building and growing concerns about oil demand in slowing economies were the main drivers of oil prices after Wednesday’s decision by OPEC+ to increase collective oil production group’s target by 100,000 barrels per day (bpd) in September, which was largely seen as a non-event by analysts.
“Oil prices are weak following the OPEC+ meeting, which may have less bearing on price action than the outlook for the global economy, as a possible looming recession weighs on the outlook of demand,” strategists at Saxo Bank said on Thursday.
By Tsvetana Paraskova for Oilprice.com
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