Despite demand concerns, oil prices are still expected to rise this week

8 Sep 2023 , 10:08 AM

Despite continuing worries about slowing global demand, oil prices dipped for a second session on Friday. However, they were still expected to rise for a second straight week due to expectations of tightening supplies.

Brent crude prices had fallen 33 cents, or 0.4%, to $89.59 per barrel, while U.S. West Texas Intermediate crude (WTI) futures had fallen 33 cents, or 0.4%, to $86.54.

As a result of concerns about probable shortages during the peak winter demand season and the extension of Saudi Arabia and Russia’s voluntary supply cuts through the end of the year, both benchmarks earlier this week rose to 10-month highs.

According to figures released on Thursday, China’s overall exports and imports decreased in August as the world’s second-largest economy felt the twin strains of weakening consumer spending and declining global demand. But last month saw a 30.9% spike in China’s imports of crude as refineries accelerated processing and stocked up on fuel in order to profit from higher fuel export prices.

Oil prices received only modest boost from a greater-than-anticipated drop in U.S. crude oil stocks.

According to Energy Information Administration statistics released on Thursday, U.S. crude oil inventories have dropped for a fourth straight week and are down more than 6% over the past month as a result of oil refineries operating at full capacity to meet the world’s rising energy demand.

Triple the 2.1 million barrel decline that economists predicted, the decrease in crude inventories was 6.3 million barrels.

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