Oil prices slip for fifth session on demand worries
Updates with analyst quote in last paragraph and prices as of 0639 GMT
By Trixie Yap
Aug 22 (Reuters) -Oil prices fell for a fifth session on Thursday as investors worried about the globaldemand outlook, despite a decline in U.S. fuel inventories.
Brent crude futures LCOc1 slipped 10 cents to $75.95 a barrel, while U.S. West Texas Intermediate crude CLc1 futures fell 23 cents to trade at $71.70 at 0639 GMT.
The front-month WTI contract for October has dropped 6.9% since Aug. 15, while Brent futures are down 6.4% over the same period.
Prices have plunged amid a report on Wednesday of revised employment statistics in the U.S., the world's biggest oil consumer, that showed fewer jobs were added in 2024 than previously reported, and weak economic data last week from China, the world's second-largest economy and largest oil importer.
Investors are also expecting the Organization of the Petroleum Exporting Countries (OPEC) and its allies such as Russia, known as OPEC+, will lift some voluntary output cuts in October, adding more supply.
"Weak global demand and the potential threat on OPEC+ rolling back on their production cuts are weighing on oil," said Priyanka Sachdeva, a senior market analyst at Phillip Nova, adding that conflict in the Middle East and geopolitical tensions elsewhere aretilting risks to the upside.
Concerns overhow OPEC+ production would pan out in the fourth quarter if the cuts are lifted has exacerbated price weakness, though they could be paused or reversed if needed.
"The downward pressure on prices makes it increasingly likely that OPEC+ will have to scrap their plans for gradually increasing supply from October. Failing to do so, will likely put further pressure on prices," said ING analysts in a client note.
Crude prices have been slipping despite a U.S. government report on Wednesday showing U.S. crude, gasoline and distillate inventories fell in the week ending Aug. 16, at the same time refinery runs increased.
"Despite inventory draws across crude and other key major products ... weak Chinese oil import data and subdued middle distillate demand in the U.S.have helped to reduce geopolitical risk premium for the oil complex," said Citi analysts in a client note.
Concerns overthe Israel-Gaza war have eased in the past week as the U.S., Israel and Hamas are trying to hammer out a ceasefire deal, though U.S. diplomatic efforts earlier this week ended without a truce.
"Upside catalysts for oil may seem limited for now, with rising odds of a ceasefire in the Middle East, which saw market participants pricing out some of the geopolitical risks," IG market strategist Yeap Jun Rong said in an email.
"Economic conditions in the U.S., while supportive for upcoming policy easing, does not offer much reassurances for a stronger oil demand outlook just yet," he added.
Reporting by Katya Golubkova in Tokyo and Trixie Yap in Singapore; Editing by Shri Navaratnam, Christian Schmollinger and Kim Coghill
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