- US crude oil inventories fall for fourth straight week – EIA
- Mixed Chinese data, perhaps weighing on weak winter demand
- As oil production from Iran increases, Venezuela also lowers prices
HOUSTON, Sept 7 (Reuters) – U.S. and Brent crude futures fell $1 a barrel on Thursday.
Brent crude futures were down $1.00, or 1.11%, at $86.60 a barrel at 1:03 pm EDT (1603 GMT), while US West Texas Intermediate (WTI) crude futures were down $1.00, or 1.14%, at $86.54.
“Crude futures are feeling some corrective pressure from a fresh rise in the U.S. dollar index and further weak economic numbers from the Eurozone, where economic activity increased 0.1% versus an expected 0.3%,” said senior vice president Dennis Kiesler. Trade in BOK Financial Institution.
The dollar pushed the yen to a 10-month low on Thursday and held the euro and sterling near their weakest levels in about three months, as investors placed their bets on a more resilient US economy.
Market participants are digesting mixed data from China. Overall exports fell 8.8% and imports shrank 7.3% in August. But crude oil imports increased by 30.9%.
“While crude oil imports rose last month, rising Chinese commodity exports have taken the wind out of the bulls’ sails overnight,” PVM Oil analyst Thomas Varga said.
However, US demand remained strong, according to a US government statement on Thursday.
U.S. crude stockpiles fell by 6.3 million barrels last week, a fourth straight week of declines and more than 6% in the past month, as refineries ran at a higher rate to keep pace with global energy demand, Energy Information Administration data showed.
“We’re taking a break from the rally we’ve had in West Texas Intermediate,” said Jim Ritterbusch, president of Ritterbush and Associates. “The EIA report that just came out is supportive.”
Thursday’s decline came after nine straight sessions of gains in US crude futures and seven straight gains in Brent.
Prices rose earlier in the week after the world’s top two oil exporters, Saudi Arabia and Russia, voluntarily extended supply cuts until the end of the year. These are on top of the April cuts agreed by several OPEC+ producers that run until the end of 2024.
Concerns about rising oil production from Iran and Venezuela could partially offset cuts from Saudi Arabia and Russia, which also kept a lid on the market.
“Currently, it is very difficult for us to see negative factors due to supply constraints,” said Leon Li, a Shanghai-based analyst at CMC Markets.
“However, we must consider potential demand risks such as the market slowing in the off-peak season for oil consumption in the fourth quarter, after summer demand ends.”
Reporting by Erwin Seba in Houston; Additional reporting by Aarti Somesekhar in Houston; Ahmed Khader in London; Trixie Yap in Singapore Editing by Marguerite Choi, Frances Kerry and Nick McPhee
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