Oil Prices Rebound, but Weekly Losses Likely as Demand Concerns Persist
Oil Prices Recover from Four-Month Lows
Oil prices saw a rise on Thursday, bouncing back from near four-month lows. Despite this recovery, concerns over a slowdown in global crude demand continue to loom large.
Crude Futures Trading Higher
By 03:20 ET (xx.xx GMT), oil futures were trading 1.1% higher at $76.15 a barrel, while the contract climbed 1.1% to $80.35 a barrel. Both contracts had fallen in the previous session to their lowest levels since late July, with Brent briefly trading below the key $80 a barrel level.
Global Crude Demand Slows
Despite the day’s gains, the market is on track for significant losses this week. Data from the American Petroleum Institute revealed that U.S. crude inventories saw their biggest weekly build since February, with an increase of almost 12 million barrels in the week to Nov. 3.
Concerns in China and Europe
China, the world’s biggest oil importer, fell back into disinflationary territory in October, indicating that the country’s recovery is wavering despite efforts to improve economic growth. Additionally, data from Europe showed weak performance and a downturn in eurozone business activity last month, suggesting a growing chance of a recession in the energy-consuming region.
OPEC’s Growth Assurances Disregarded
Assurances from the Organization of Petroleum Countries were largely disregarded due to concerns about a slowing global economy and falling crude demand. The United States is experiencing growth, while Europe is struggling, and China is forecasted to grow at 4.5% to 5%, outstripping Europe.
Powell’s Influence on Crude Prices
Investors are keeping an eye on the movements of the U.S. dollar, with Fed Chair Powell set to speak later in the session. Powell’s speech could potentially affect crude prices due to its impact on the U.S. currency and foreign buyers.
Unemployment Benefits and Market Indicators
The number of Americans filing for unemployment benefits fell last week, indicating that the labor market continues to show few signs of a significant slowdown. This data, along with other market indicators, will play a crucial role in shaping future crude oil trends.