Oil down over data suggesting economic slowdown in US

By Duygu Alhan

Oil prices decreased on Thursday, with data signaling a slowdown in economic activity in the US, the world's largest oil consumer, slightly offset by data portraying a decline in the nation's commercial crude oil inventories and oil production.

International benchmark Brent crude traded at $86.66 per barrel at 9.58 a.m. local time (0658GMT), down 0.78% from the closing price of $87.34 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $83.13 per barrel, a 0.89% fall from the previous session when it closed at $83.88 per barrel.

Both benchmarks fell during early Asian trade following macroeconomic data released in the US on Wednesday, which gave negative signals about the country's economic growth.

The latest data showed that private payrolls increased by 150,000 in June, below market expectations, and annual wage growth also recorded the slowest increase since August 2021, at 4.9%.

The number of people applying for unemployment benefits for the first time in the US also increased by 4,000 to 238,000 in the week ending June 29, compared to the previous week, exceeding expectations.

The negative economic data in the world's largest oil consumer put downward pressure on oil prices by causing demand concerns among market players.

Meanwhile, official statistics from the Energy Information Administration (EIA) released late Wednesday portrayed a positive demand outlook and limited price losses.

According to the EIA, US commercial crude oil stocks decreased by around 12.2 million barrels to 448.5 million barrels, compared to the market's estimate of a decline of about 400,000 barrels. ​​​​​​​

Over the same period, gasoline inventories fell by approximately 2.2 million barrels to 231.7 million barrels.

The data also showed that US crude oil production declined by 27,000 barrels per day (bpd) to around 13.58 million bpd during the week ending June 28. The decrease in oil production reinforced supply concerns among market participants and helped push oil prices up.