Oil Dips Amid Supply Ease and Demand Fears

23 Aug 2024 , 10:18 AM

Oil prices remained steady in early Asian trading Friday, but were expected to fall by the end of the week as downward revisions to US employment statistics raised demand concerns and peace talks in Gaza alleviated supply disruption fears.

Brent crude futures were down one penny to $77.21 a barrel. U.S. West Texas Intermediate (WTI) oil futures rose 4 cents to $73.05 per barrel.

On Thursday, both benchmarks gained for the first time in five sessions on optimism that the US Federal Reserve would drop interest rates shortly, easing concerns about the top oil consumer’s economic outlook.

The minutes of the Federal Reserve’s July meeting, released on Wednesday, showed that most Fed officials believed the central bank was on pace to decrease interest rates next month.

Still, Brent futures were expected to fall by almost 3% this week, while WTI was expected to fall by over 5%.

Both benchmarks fell to their lowest since early January earlier this week, when the US government revised substantially lower its estimate of employment added by employers in the country this year through March.

This raised concerns about a probable recession in the United States, which would reduce demand in the world’s largest oil consumer.

Recent figures from China, the world’s largest oil importer, have also shown a weakening economy and declining oil demand from refiners there.

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