Oil Prices Inch Up Amidst Weak Demand and Ceasefire Hopes
In a turbulent market, oil prices saw a slight rise on Friday as they headed towards a third consecutive week of declines. This drop can be attributed to weak demand in China, the largest importer of crude oil in the world, as well as expectations of a ceasefire deal to end the Gaza war and related violence in the Middle East.
Brent crude futures for September saw a 0.2 percent increase, climbing 15 cents to reach $82.52 a barrel by 8:48 a.m. Saudi time. Meanwhile, US West Texas Intermediate crude for September also rose by 0.2 percent, gaining 13 cents to hit $78.41 per barrel.
Despite the gains seen on Friday and Thursday, driven by data showing faster-than-expected growth in the US economy during the second quarter, the overall trend has been one of decline in recent weeks.
Over the past three weeks, the benchmarks have dropped by approximately 5 percent. While Brent is experiencing marginal losses this week, WTI has seen a decrease of over 2 percent.
Recent Chinese data revealed a concerning 8.1 percent decline in the country’s apparent oil demand, which fell to 13.66 million barrels per day in June. This has raised worries about consumption, according to analysts at ANZ Research.
ANZ noted, “The weakness is likely driven by gasoline and diesel, as rising new energy and autonomous driving vehicles become more popular.”
Additionally, prices were dragged down by the growing optimism surrounding a potential end to the conflict in Gaza.
US Vice President Kamala Harris exerted pressure on Israeli Prime Minister Benjamin Netanyahu on Thursday to facilitate a ceasefire deal that would alleviate the suffering of Palestinian civilians, taking a firmer stance than President Joe Biden.
Negotiations for a ceasefire have been ongoing for months, with US officials believing that the parties are closer than ever to reaching an agreement. The proposed deal involves a six-week ceasefire in exchange for the release of women, sick, elderly, and wounded hostages held by Hamas.