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Oil prices saw a slight uptick on Friday but remained on course for a third consecutive week of declines, influenced by weak demand from China and evolving geopolitical developments in the Middle East.
Marginal Gains on Friday
Brent crude futures for September inched up by 12 cents, or 0.2%, to $82.49 per barrel by 0014 GMT, while U.S. West Texas Intermediate (WTI) crude for September gained 13 cents, also 0.2%, to $78.41 per barrel. Despite these modest increases on Thursday and Friday, driven primarily by stronger-than-expected U.S. economic growth in the second quarter, the gains were insufficient to counteract broader declines observed over the past few weeks.
Weekly Decline Persists
Both Brent and WTI crude benchmarks have fallen approximately 5% over the last three weeks. Brent has traded slightly lower this week, while WTI has experienced a drop of over 2%. This trend reflects ongoing concerns about global oil demand and geopolitical tensions.
Weak Demand in China
A significant factor contributing to the recent price declines is the weak demand from China, the world’s largest crude importer. Data released this week revealed that China’s apparent oil demand dropped by 8.1% to 13.66 million barrels per day in June. Analysts at ANZ Research have highlighted this decline as a major concern, signaling potential issues with future consumption.
Geopolitical Developments Impact Prices
Further affecting oil prices are evolving expectations of a ceasefire in the Gaza conflict. U.S. Vice President Kamala Harris has intensified pressure on Israeli Prime Minister Benjamin Netanyahu to facilitate a ceasefire, adopting a firmer stance than President Joe Biden. Negotiations for a ceasefire have been ongoing for months, with recent developments suggesting that a six-week ceasefire agreement might be imminent. This deal is expected to involve the release of women, the elderly, and wounded hostages held by Hamas.
As the situation progresses, the combination of weak demand and geopolitical uncertainty continues to influence oil market dynamics, leaving traders and analysts closely monitoring developments in both areas.
