ALBAWABA - Oil prices fell globally today amid concerns about the demand in China. This drop is highlighted by China current economy, which is known to be the biggest crude importer in the world as well as the ceasefire negotiations in the Middle East.
Brent crude futures for September delivery fell about 38 cents, or 0.5%, to $81.33 per barrel while West Texas Intermediate (WTI) crude futures fell 33 cents, or 0.4%, to $77.26 per barrel as reported by Reuters.
US oil stocks
US crude stocks increased on Wednesday after U.S. Energy Information Administration (EIA) said that US crude inventories fell by 3.7 million barrels last week while analysts expected a decline of only 1.6 million barrels and US gasoline stocks fell by 5.6 million barrels while analysts expected a decrease of 400 thousand barrels.
Oil prices are expected to fall more due to China's demand and ceasefire situation in the Middle East (Shutterstock)
Hiroyuki Kikukawa, President of NS Trading, a unit of Nissan Securities, said: “Despite draws in US crude and gasoline stocks, investors remained wary about weakening demand in China and expectations of advancing ceasefire talks between Israel and Hamas added to pressure.”
Crude in China
According to the Chinese government, oil imports are set to decline this year compared to 2023. This is mainly because of the low fuel demand and slow economic growth.
Middle East situation
The Middle East is witnessing ceasefire negotiations to end the war in Gaza Strip. These negotiations were planned by US, Egypt, and Qatar.
Satoru Yoshida, Commodity Analyst with Rakuten Securities, said oil prices will possibly fall if the ceasefire negotiations proceed and if China’s economy keeps its slow pace.
