Oil prices fell further on Thursday, dropping by 2% to their lowest points since early August, as anxieties about weaker U.S. gasoline demand and a slow economic rebound from the coronavirus outbreak weakened sentiment.
Bonny Light, Nigeria’s premium crude grade, was down by $1.13 or 2.54% at $43.28 in the previous session. Qua Iboe, another major national oil offering, depreciated by $1.55 or 3.37% to $44.51 a barrel.
The two benchmarks, Brent and WTI, dropped by over 2% on Wednesday.
Last week, U.S. petrol demand crashed to 8.78 million barrels per day (bpd) from 9.16 million the week before, Energy Information Administration (EIA) figures revealed Wednesday, with construction of other oil products also tumbling.
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“It is the latest data set that possibly caught the eye of those who ran long positions, and not even another record close in the U.S. stock market was able to change the direction of the herd,” Tamas Varga of oil brokerage PVM said.
Other statistics, like U.S. private employers hiring fewer staff than anticipated for a second month in a row in August, also stoked fears that economic recovery was sluggish.
However, oil marketers got support from Iraq’s denial it was pursuing exemption from OPEC+ oil cuts in the first quarter of 2021.
Iraq also said it might seek to prolong by two months until the end of November the period for making further compensation cuts under the OPEC+ deal.
Analysts said the upcoming refinery maintenance and the end of the summer driving season would also cap crude demand.
WTI crude has been strained “after U.S. refiners earmarked a long list of maintenance closures over the coming months that will no doubt impact demand for crude oil”, ANZ Research said in a note on Thursday.
U.S. refinery utilisation rates decreased by 5.3 percentage points to 76.7% of total capacity by reason of Hurricane Laura, said the EIA.
“These factors suggest a seasonal drop-off in refinery runs and higher oil inventory levels as we advance through September,” AxiCorp market strategist Stephen Innes said.
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