Oil prices experienced a decline on Thursday, continuing the losses observed in the previous session. This drop was primarily driven by signals indicating higher oil supply from the United States, coupled with concerns about sluggish energy demand from China.
The Brent futures, a benchmark for global oil prices, slipped by 72 cents to reach $80.46 per barrel as of 0400 GMT. Similarly, the U.S. West Texas Intermediate crude (WTI) also experienced a decline of 67 cents, settling at $75.99 per barrel.
Both the Brent and WTI benchmarks had already fallen by more than 1.5% in the prior session, further contributing to the downward trend in oil prices.
The front-month contract of WTI crude oil was observed to be trading below the price for the second month. This market structure, known as contango, suggests that investors anticipate an increase in prices. On Thursday, the front month’s discount to the second month was recorded at minus 13 cents.
“Concerns over a record-high U.S. production rate put fresh pressure on oil prices, adding to an already worrisome demand outlook,” said Tina Teng, a markets analyst at CMC Markets in Auckland.
Last week, U.S. crude stocks surged by 3.6 million barrels to reach 421.9 million barrels, a notable increase that surpassed the 1.8 million-barrel rise predicted by analysts in a Reuters poll, as reported by the U.S. Energy Information Administration (EIA).
Simultaneously, U.S. crude production remained constant at a record 13.2 million barrels per day (bpd), reflecting a stabilization in output levels.
In Asia, China experienced a slowdown in oil refinery throughput during October, attributed to weakened industrial fuel demand and narrowed refining margins. However, the country’s economic activity showed signs of improvement, with accelerated industrial output and retail sales growth surpassing expectations.
Nevertheless, concerns lingered around China’s property sector as data released on Thursday revealed a fourth consecutive monthly decline in new home prices in October. Additionally, property sales by floor area witnessed a substantial 20.33% year-on-year decrease, highlighting ongoing challenges in the real estate market.