Oil Prices Rise Amid Global Demand Concerns and Supply Disruption Fears

Oil prices saw an uptick on Friday, but the market is set to record its fourth consecutive weekly decline. Despite the recent rise, signs of disappointing global fuel demand growth have overshadowed fears of supply disruptions, leading to a bearish outlook.

Current Market Performance

• Brent Crude Futures: Up 55 cents, or 0.7%, to $80.08 per barrel by 0707 GMT.
• U.S. West Texas Intermediate (WTI) Crude Futures: Up 57 cents, or 0.8%, to $76.89 per barrel.

Both benchmarks have experienced a decline of approximately 7.3% over the past four weeks, marking the longest streak of consecutive weekly losses this year.

Factors Influencing Oil Prices

1. Disappointing Economic Data:

• Economic indicators from China, the top oil importer, have been underwhelming.
• Surveys indicate weaker manufacturing activity across Asia, Europe, and the United States, raising concerns about a sluggish global economic recovery that could impact oil consumption.

1. China’s Manufacturing Activity:

• Falling manufacturing activity in China has exacerbated concerns about demand growth.
• June data revealed that imports and refinery activity in China were lower compared to the previous year.
• Asia’s crude oil imports in July hit a two-year low, driven by weak demand in China and India, according to LSEG Oil Research.

1. Geopolitical Tensions:

• Investors are closely monitoring developments in the Middle East.
• The recent killing of senior leaders of Iran-aligned militant groups Hamas and Hezbollah has heightened fears of a potential all-out war in the region, which could disrupt oil supplies.

Outlook

The oil market remains cautious amid these mixed signals. While short-term price gains offer some respite, the overarching concerns about global demand and geopolitical instability suggest continued volatility in the oil markets. Investors will be watching economic indicators and geopolitical developments closely to gauge future movements.