ALBAWABA – Oil prices slipped 0.2 percent on Thursday, to $76.80 and $72.41 on the barrel of Brent crude futures for August settlement and West Texas Intermediate (WTI) crude futures for July.
Agencies reported conflicting news on oil prices Thursday amid persistent demand concerns.
Worries over weakening Chinese demand and United States stockpile data outweighed Saudi Arabia’s announcement it would slash output in July, earlier in the week, Reuters reported.
Oil is still down 10 percent this year as China’s sluggish economic recovery, interest rate hikes from the Federal Reserve and robust Russian crude flows all weigh on oil prices, according to Bloomberg.
Saudi Arabia, Sunday, announced that it will cut oil production by one million barrels per day, starting July. The announcement came after members of the Organization of Petroleum Exporting Countries and their allies (OPEC+) held their oil policy meeting June 13-14.
Bloomberg reported discord between Saudi and Russia, Tuesday, over the latter’s lack of transparency on output and supply. The discussion reportedly intensified over the continued high flow of Russian oil to market and failing to stick to the agreed quota.
According to the New York-based news agency, Saudi undertook the output cut on its own in an effort to offset Russian oil flooding the market, as other OPEC+ members were unwilling to share the cut.
Meanwhile, even though US gasoline stockpiles rose for the first time in five weeks, Bloomberg underlined, inventories are still below the five-year seasonal average, the Energy Information Administration’s data showed.
The Memorial Day weekend at the end of May is typically the start of the nation’s summer driving season.
If anything, this highlights the possibility of low demand from the US for oil.
Notably, the US and China are the world’s top oil consumers and biggest economies, and both are showing signs of sluggish oil demand.
