U.S. and China Weakness Remain in Focus for Oil

Crude markets are flat on Thursday having slipped in Wednesday’s session, as U.S. and China economic weakness remain the key areas of pressure.

• Brent OCT 24 down -0.1% at 75.96$/bbl
• WTI OCT 24 down -0.3% at 71.73$/bbl
• Gasoil SEP 24 down -1.7% at 687.5$/mt
• WTI-Brent down -0.06$/bbl at -4.23$/bbl
• A report on Wednesday of revised employment statistics in the U.S. showed that fewer jobs were added in 2024 than previously reported and added to weak economic data last week from China that was already weighing on markets.
• Markets remain poised for the impact of OPEC+ bringing barrels back to the market from October but its return remains open for change.
• "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," ING said.
• "Despite inventory draws across crude and other key major products ... weak Chinese oil import data and subdued middle distillate demand in the US have helped to reduce geopolitical risk premium for the oil complex," Citi said.
• Key benchmarks have lost yearly gains and now reside back at January levels as less robust job growth in the U.S. overpowered any uplift from inventory draws in the latest EIA report.
• Timespreads are showing less market tightness. The gap between the Brent contract for this December vs the same next year has narrowed to $2.77/bbl in backwardation, compared with more than $4/bbl at the start of last week.
• U.S. gasoline demand slipped to 9.11mn bpd in the four-week average data by the EIA, down from 9.18mn bpd last week as the summer driving season begins to unwind.