Oil fell amid concerns about demand in China and during the winter season

Oil prices fell on Thursday as concerns about demand during the winter season and China’s unclear economic outlook outweighed expectations of tight supplies as a result of Saudi Arabia and Russia extending voluntary production cuts.

Brent crude futures fell 24 cents to $90.36 a barrel by 0412 GMT, after a series of gains that lasted nine sessions. US West Texas Intermediate crude futures also fell 29 cents to $87.25 after gains that lasted for seven sessions.

The two benchmarks rose earlier in the week after Saudi Arabia and Russia, the world’s largest oil exporters, extended voluntary supply cuts until the end of the year. This came in addition to cuts agreed upon by several countries in the OPEC+ group in April, which will continue until the end of 2024.

A mix of mixed data from China also weighed on prices, with total exports falling 8.8 percent in August year-on-year and imports shrinking 7.3 percent. But crude oil imports rose 30.9 percent year-on-year.

However, Li explained that it is still too early to judge the pace of demand recovery in China now, although it is expected to be better than it was in July.

Concern about rising oil production from Iran and Venezuela, which could offset part of the Saudi and Russian cuts, also limited market losses.

A report by analysts from BMI stated, “OPEC+’s actions are being partially undermined with the return of Iranian oil subject to sanctions. Iranian crude production has been increasing since the beginning of the year until it reached 2.83 million barrels per day in July, up from 2.55 million barrels per day in January.”

On the support front for oil prices, US oil inventories are expected to decline by 5.5 million barrels in the week ending September 1.

The US Energy Information Administration is scheduled to release official inventory data at 11 a.m. EST (1500 GMT) on Thursday.