Oil prices nurse steep losses as demand fears outweigh tight supplies
Investing.com-- Oil prices fell slightly on Wednesday, extending sharp losses after a swathe of weak economic readings raised concerns over demand, although other data showed a sustained decline in U.S. inventories.
The prospect of a deescalation in the Israel-Hamas war also stymied bets that the conflict will disrupt Middle Eastern oil supply, as multiple reports suggested that Israel had delayed a planned ground assault on Gaza.
Crude prices fell about 2% on Tuesday as weak data from the euro zone pointed to deteriorating economic conditions in the region, which could in turn stymie oil demand.
The weak data largely overshadowed positive purchasing managers’ index readings from the U.S., while other data also showed that U.S. inventories likely shrank further in the past week.
Brent oil futures fell 0.1% to $87.98 a barrel, while West Texas Intermediate crude futures fell 0.2% to $83.56 a barrel by 20:58 ET (00:58 GMT). Both contracts were close to a two-week low.
Data from the American Petroleum Institute (API) showed that U.S. inventories shrank more than 2 million barrels (mb) in the week to October 20, ducking expectations for a build of 1.6 mb.
The reading indicated that steady exports and domestic fuel consumption were keeping U.S. supplies tight, with fuel demand remaining strong even after the end of the summer season.
The API data usually heralds a similar trend in government data on inventories, which is due later on Wednesday. The decline in inventories comes amid tightening global supplies, following deep supply cuts by Saudi Arabia and Russia earlier this year.
The inventory data was preceded by strong PMI readings, which showed that both U.S. manufacturing and services activity unexpectedly grew in
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