🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Oil prices settle lower as rebound fades

Published 07/12/2023, 01:02 pm
Updated 08/12/2023, 07:58 am
© Reuters.
LCO
-
CL
-
GPR
-

Investing.com - Oil prices settled lower Thursday as a rebound from six-month lows proved short lived as fresh demand worries and ongoing oversupply concerns quashed an intraday rebound.

By 14:30 ET (19:30 GMT), the U.S. crude futures settled 0.06% lower at $69.34 a barrel, while the Brent contract fell 0.34% to $74.95 per barrel.

Rebound fades as oversupply concerns persist amid fresh demand jitters

Chinese customs figures showed that crude oil imports in November slipped by 9% compared to the same period last year, a reading that exacerbated fears over demand in the country and limited oil price gains.

A decision by rating agency Moody's (NYSE:MCO) to downgrade the outlook for China's sovereign debt rating earlier this week has also dented investor sentiment. Moody's flagged increased risks to the world's second-largest economy from a property market meltdown, as well as a lack of clear policy support from the government.

Analysts quoted by Reuters added that markets were also worried by a higher-than-expected build in U.S. gasoline stocks, which hinted at faltering demand in the world's biggest oil consumer. U.S. gasoline futures slumped to a near two-year low after the data, which also showed a larger-than-anticipated draw in overall crude inventories over the week to Dec. 1.

Russian, Saudi leaders meet after OPEC+'s voluntary cuts underwhelm

On Wednesday, Russian President Vladimir Putin met with Saudi Crown Prince Mohammed bin Salman, with the two reportedly discussing further co-ordination between OPEC+ member states. Saudi Arabia and Russia have led the group of major oil producers in cutting supply throughout 2023 in an attempt to give support to crude prices.

Oil prices have slipped by around 10% since OPEC+, the common moniker of the Organization of the Petroleum Exporting Countries and its allies including Russia, announced output reductions last week. The cuts were only voluntary in nature for the group's members, leaving many traders skeptical of their ability to lift prices.

But while the OPEC+ announcement underwhelmed markets, it is still expected to help tighten crude markets marginally in the first quarter of 2024. Analysts expect Brent to trade in the low $80s in early-2024.

Scott Kanowsky and Ambar Warrick contributed to this report.

Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon code INVESTPRO to get a limited time discount on our InvestingPro+ subscription plan. Click here to find out more, and don't forget to use the discount code when checking out.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.