https://sputnikglobe.com/20240830/oil-prices-tumble-for-2nd-month-as-demand-worries-usurp-middle-east-risk-1119964093.html
Oil Prices Tumble for 2nd Month as Demand Worries Usurp Middle East Risk
Oil Prices Tumble for 2nd Month as Demand Worries Usurp Middle East Risk
Sputnik International
Crude prices tumbled a second month in a row as August trading concluded on Friday amid worries about Chinese demand that offset fears about the war in the Middle East disrupting oil shipments.
2024-08-30T21:03+0000
2024-08-30T21:03+0000
2024-08-30T21:02+0000
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US West Texas Intermediate (WTI) crude settled the final session of August down $2.36, or 3.11%, at $73.55 per barrel. That brought WTI’s losses for the week to 1.7%. For the month, the US crude benchmark fell 5.6%, adding to July’s deficit of 4.5%. UK-origin Brent crude finished the New York trading session down $1.14, or 1.4%, at $78.80 per barrel. For the week, Brent slid just 0.3%. For the month, the global crude benchmark slumped 2.5%, adding to July’s plunge of 6.5%. Despite crude prices continuing their downtrend for the second month in a row, August proved to be a volatile month for the trade. This week, particularly, was proof of that. WTI and Brent rallied for two days on concerns about output disruptions in Libya and the potential for a major Iranian strike on Israel that could reignite geopolitical risk in the Middle East. Offsetting those gains were three days of losses on data pointing to weaker growth in China. Some were surprised by the tumble in WTI, given the potential for road-trips among Americans celebrating the long Labor Day weekend that includes a holiday on Monday. Even so, GasBuddy, a website that tracks US fuel prices and road travel trends, said this year’s Labor Day might be “the least popular summer holiday to hit the road.” It said just over a third of respondents to its survey had travel plans for the occasion. WTI has also been negatively impacted by less-than-flattering consumption numbers for oil reported by the US Energy Information Administration (EIA) for the just-ended week. US crude inventories fell by just 846,000 barrels during the week ended August 23, the EIA said, versus expectations for a 2.8-million barrel drop and the prior week’s consumption of 4.7 million. Distillate stockpiles did worse, sliding by only 275,000 barrels against an expected draw of 815,000 barrels and the prior week’s tumble of 3.3 million. Distillates are primarily processed into the diesel required by trucks, buses, and ships, and also goes into making airplane fuel. Only gasoline stockpiles came in as forecast, drawing 2.2 million barrels versus expectations for 2.15 million and the prior week’s usage of 1.6 million. Gasoline is the primary motor fuel in the United States and makes up the largest component of the country’s energy mix. US crude prices aren’t the only one in bearish territory. Goldman Sachs, Wall Street’s leading forecaster of oil prices, has slashed its outlook on Brent by $5 to a wide range of between $70 and $85 for the remainder of the year. For 2025, it expected a barrel to average $77, versus $82 before. Daan Struyven, head of oil research at Goldman Sachs, attributed the dour outlook on Brent to weaker oil demand in China as the world’s second-largest economy turns from gasoline-powered cars to electric vehicles. China’s economy is also stuttering. Prices of newly constructed homes fell 4.9% in July from a year earlier, the fastest drop in nine years, according to calculations by Reuters. Unemployment ticked up last month by 0.2% to 5.2%, with the 16-24 age group, particularly, hit by a 17% jobless rate — the highest since such data became available in December.
https://sputnikglobe.com/20240821/oil-prices-hit-new-2024-low-as-us-jobs-cut-scare-offsets-crude-draws-1119866862.html
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Oil Prices Tumble for 2nd Month as Demand Worries Usurp Middle East Risk
NEW YORK (Sputnik) - Crude prices tumbled a second month in a row as August trading concluded on Friday amid worries about Chinese demand that offset fears about the war in the Middle East disrupting oil shipments.
US West Texas Intermediate (WTI) crude settled the final session of August down $2.36, or 3.11%, at $73.55 per barrel. That brought WTI’s losses for the week to 1.7%. For the month, the US crude benchmark fell 5.6%, adding to July’s deficit of 4.5%.
UK-origin Brent crude finished the New York trading session down $1.14, or 1.4%, at $78.80 per barrel. For the week, Brent slid just 0.3%. For the month, the global crude benchmark slumped 2.5%, adding to July’s plunge of 6.5%.
Despite crude prices continuing their downtrend for the second month in a row, August proved to be a volatile month for the trade.
This week, particularly, was proof of that. WTI and Brent rallied for two days on concerns about output disruptions in Libya and the potential for a major Iranian strike on Israel that could reignite geopolitical risk in the Middle East. Offsetting those gains were three days of losses on data pointing to weaker growth in China.
Some were surprised by the tumble in WTI, given the potential for road-trips among Americans celebrating the long Labor Day weekend that includes a holiday on Monday.
Even so, GasBuddy, a website that tracks US fuel prices and road travel trends, said this year’s Labor Day might be “the least popular summer holiday to hit the road.” It said just over a third of respondents to its survey had travel plans for the occasion.
WTI has also been negatively impacted by less-than-flattering consumption numbers for oil reported by the US Energy Information Administration (EIA) for the just-ended week.
US crude inventories fell by just 846,000 barrels during the week ended August 23, the EIA said, versus expectations for a 2.8-million barrel drop and the prior week’s consumption of 4.7 million.
Distillate stockpiles did worse, sliding by only 275,000 barrels against an expected draw of 815,000 barrels and the prior week’s tumble of 3.3 million. Distillates are primarily processed into the diesel required by trucks, buses, and ships, and also goes into making airplane fuel.
Only gasoline stockpiles came in as forecast, drawing 2.2 million barrels versus expectations for 2.15 million and the prior week’s usage of 1.6 million. Gasoline is the primary motor fuel in the United States and makes up the largest component of the country’s energy mix.
US crude prices aren’t the only one in bearish territory. Goldman Sachs, Wall Street’s leading forecaster of oil prices, has slashed its outlook on Brent by $5 to a wide range of between $70 and $85 for the remainder of the year. For 2025, it expected a barrel to average $77, versus $82 before.
Daan Struyven, head of oil research at Goldman Sachs, attributed the dour outlook on Brent to weaker oil demand in China as the world’s second-largest economy turns from gasoline-powered cars to electric vehicles.
China’s economy is also stuttering. Prices of newly constructed homes fell 4.9% in July from a year earlier, the fastest drop in nine years, according to calculations by Reuters. Unemployment ticked up last month by 0.2% to 5.2%, with the 16-24 age group, particularly, hit by a 17% jobless rate — the highest since such data became available in December.
