On Thursday’s early trade, oil prices were nearly unchanged close to the lowest level in weeks on the back of fuel demand concerns due to a patchy US economic recovery.
By 01.15 GMT, Brent crude oil futures inched down by 0.2% or 7 cents to USD44.36/barrel while the US WTI crude futures stepped up by 0.1% or 3 cents to USD41.54/barrel.
In the previous session, both benchmarks slumped by more than 2%. Brent was at the lowest since August 21 while the WTI slipped to the lowest close in almost four weeks.
The readings followed a survey from the US Federal Reserve that the country’s economic recovery was mixed. Simultaneously, data also showed that the US August jobs growth was weaker than the forecast, but the July factory orders were higher than expectations.
Weighing more on crude prices was the report from the US Energy Information Administration (EIA) that the country’s gasoline demand went down to 8.78 million bpd in the week ended August 28. In comparison, the previous week showed 9.16 million bpd of demand.
Last week, US refinery run rates dropped to 76.5% of total capacity due to shutdowns ahead of Hurricane Laura.
Looking ahead, Commonwealth Bank (CBA) commodities analyst Vivek Dhar estimated that over the next 12 months, oil prices would only gradually recover as the spare oil capacity is ample, combined with significant pressure to demand growth.
CBA then disclosed its expectation that in the fourth quarter of 2020, Brent would average at USD46/barrel before climbing to USD55/barrel by the end of 2021.
Stephen Innes of AxiCorp added that refinery runs and higher oil stockpile levels would mean a seasonal drop off is coming through September.
