Oil prices decline due to concerns about demand in Asia and the build-up of US crude

16 Nov 2023 , 10:37 AM

As concerns about weak energy demand from Asia collided with signs of increased US supply, oil prices fell on Thursday, prolonging losses from the previous session.

Brent futures had dropped 28 cents to $80.90 a barrel. West Texas Intermediate (WTI) oil fell 31 cents to $76.35 a barrel in the United States.

The previous session saw a 1.5% decline in both benchmarks.

Due to a contango structure, WTI’s front-month contract was also less expensive than the second month, indicating that investors anticipate price increases in the near future. The largest discount since July occurred on Wednesday when the front month’s discount to the second month traded at minus 15 cents.

The U.S. Energy Information Administration (EIA) reported that U.S. crude stocks increased by 3.6 million barrels last week to 421.9 million barrels, significantly above analysts’ estimates in a Reuters poll for a 1.8 million-barrel increase.

The United States continued to produce a record 13.2 million barrels of crude oil per day.

In the meantime, as industrial fuel demand declined and refining margins contracted, China’s oil refinery throughput decreased in October compared to the peak levels reached the month before. Even so, October saw a pick-up in economic activity due to faster-than-expected increases in industrial output and retail sales.

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