By Stephanie Kelly
NEW YORK (Reuters) -Oil prices slid more than $1 on Wednesday to their lowest in more than three months on concern over waning demand in the United States and China.
futures fell $1.68, or 2%, to $79.93 a barrel by 11:00 a.m. EST (1600 GMT). lost $1.78, or 2.3%, to $75.59. Both benchmarks hit their lowest since late July.
“The market is clearly less concerned about the potential for Middle Eastern supply disruptions and is instead focused on an easing in the balance,” ING analysts Warren Patterson and Ewa Manthey said in a note to clients, referring to crude supply conditions.
Crude production in the United States this year will rise by slightly less than previously expected but demand will fall, the U.S. Energy Information Administration (EIA) said on Tuesday.
The EIA now expects total U.S. petroleum consumption to fall by 300,000 barrels per day (bpd) this year, reversing its previous forecast of a 100,000 bpd increase.
U.S. crude oil stocks rose by almost 12 million barrels last week, market sources said late on Tuesday, citing American Petroleum Institute figures. [API/S]
The EIA will delay the release of weekly inventory data until the week of Nov. 13.
Data from China, the world’s biggest crude oil importer, showed its total exports of goods and services contracted faster than expected, feeding worries about the energy demand outlook.
In the euro zone, data showing falling retail sales also highlighted weak consumer demand and the prospect of recession.
“The meltdown we’ve seen in prices is reflecting two things: concerns about the global economy hitting a brick wall based on data out of China and also a sense of confidence that the war in Israel and the Gaza Strip is not going to impact supply,” said Phil Flynn, analyst at Price Futures Group.
Still, China’s October crude oil imports showed robust growth and its central bank governor said on Wednesday that the world’s second-biggest economy is expected to hit its gross domestic product growth target this year. Beijing has set a target of about 5% growth.
Tempering supply concerns, analysts from Goldman Sachs estimated seaborne net oil exports by six countries from oil producer group OPEC will remain only 0.6 million bpd below April levels. OPEC has announced cumulative production cuts amounting to 2 million bpd since April 2023.
In more bullish news for crude prices, OPEC expects the global economy to grow and drive fuel demand despite economic challenges including high inflation and interest rates.
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