Aug 2 2024: Oil prices held steady on Friday but remained on track for a fourth consecutive weekly decline due to signs of weak global fuel demand overshadowing fears of supply disruptions in the Middle East.
As of 10:40 GMT, Brent crude futures were up 18 cents, or 0.2%, at $79.70 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 16 cents, or 0.2%, to $76.47 a barrel.
Both benchmarks have lost more than 7% over the past four weeks, marking the longest run of weekly losses this year.
Demand Concerns Weigh on Oil Prices
“Weak economic growth in major economies could stifle oil demand despite increased tensions in the Middle East that could impact supplies,” said Ashley Kelty, an analyst at Panmure Liberum.
Economic data from China, the world’s top oil importer, along with surveys indicating weaker manufacturing activity across Asia, Europe, and the United States, raised concerns about a sluggish global economic recovery that could dampen oil consumption.
Declining manufacturing activity in China further pressured prices, with June data showing imports and refinery activity lower than a year earlier.
Asia’s crude oil imports in July fell to their lowest in two years, primarily due to weak demand in China and India, according to data from LSEG Oil Research.
OPEC+ Maintains Output Policy
An OPEC+ meeting on Thursday kept the group’s oil output policy unchanged, including a plan to begin unwinding some production cuts from October.
“Crude futures were marginally higher early Friday as demand concerns continued to tip the balance against supply worries stoked by a surge in Mideast geopolitical tensions,” said Vandana Hari, founder of Vanda Insights.
Middle East Tensions Add to Supply Concerns
Oil investors are also closely monitoring developments in the Middle East. The killing of senior leaders from Iran-aligned militant groups Hamas and Hezbollah has fueled fears of a broader conflict in the region, potentially disrupting oil supplies.
Lebanon’s Iran-backed group Hezbollah stated that its conflict with Israel had entered a new phase and pledged a response after its top military commander was killed in an Israeli strike.
