LONDON (Reuters) – Prices rose above $80 a barrel on Thursday as demand concerns and a decline in war risk premiums fueled a sell-off over the past week.
By 1445 GMT, Brent crude was up 1.3 percent at $80.54 a barrel. U.S. West Texas Intermediate crude futures also rose $1.01, or about 1.3 percent, to $76.34.
The rise came after the two major crudes fell to their lowest levels since mid-July on Wednesday as concerns over potential supply disruptions in the Middle East eased and concerns over demand in the US and China rose.
Brent crude is about $20 a barrel off its peak in September.
Data released from China on Thursday indicated that efforts to control low inflation in the face of weak demand remain a challenge for the country’s policymakers.
Chinese consumer prices fell in October as key measures of domestic demand pointed to weakness not seen since the pandemic era, while deflation in the producer price index rose and cast doubt on prospects for a broader economic recovery.
Earlier in the week, China’s total exports of goods and services shrank faster than expected, customs data showed.
Demand indicators don’t look rosy in the US either. U.S. inventories rose by 11.9 million barrels in the week ended Nov. 3, the sources said, citing figures from the American Petroleum Institute.
If confirmed, it would mark the biggest weekly increase since February. However, the US Energy Information Administration delayed the release of weekly oil inventory data until November 15 in order to update the system.
On the bright side, global markets were upbeat on Thursday on hopes that major central banks have now ended their interest rate hike cycle. Higher interest rates increase the cost of borrowing, weakening demand for everything, including oil.
The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency are due to present their views on oil demand and supply fundamentals next week.
OPEC will meet at the end of the month to discuss production policy for 2024.
(Prepared by Mahmoud Reda Murad for Arab Bulletin)
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