Oil prices down amid weakening demand outlook

By Duygu Alhan

Oil prices decreased on Wednesday due to demand worries in China, while strong demand data from the US and the Israeli aggression in Gaza supported upward price movements.

International benchmark Brent crude traded at $83.56 per barrel at 9.55 a.m. local time (0655GMT), a decline of 0.2% from the closing price of $83.73 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $79.60 per barrel at the same time, a 0.1% fall from the previous session that closed at $79.71 per barrel.

According to official data released on Monday, the gross domestic product (GDP) of China fell short of expectations in the second quarter, growing by 4.7% compared to the same period last year.

Meanwhile, retail sales in China, the world's largest oil exporter, increased by 2%, the slowest increase recorded since December 2022.

Weak economic data from China, the world's largest crude importer, supported downward price movements, fueling market players' demand fears.

However, the fall in US commercial crude oil reserves, which reflect market perceptions of strengthening domestic demand, limited downward price movements.

Data released on Tuesday by the American Petroleum Institute showed a decrease of 4.4 million barrels in US crude oil inventories, against the market prediction of a 1.9 million barrel draw.

Later in the day, the Energy Information Administration (EIA) will disclose official figures. If the EIA confirms a decline in gasoline and crude oil stockpiles, prices are predicted to rise even higher.

Also, the Israeli aggression in Gaza and the ongoing conflicts in the Middle East, home to most of the global oil reserves, continue to influence upward price movements.

Israeli warplanes targeted a house in the Al-Manara neighborhood of Khan Younis in the southern Gaza Strip late Tuesday, with no immediate reports of injuries.

Earlier, an Israeli strike hit a residential apartment in the Tel al-Hawa neighborhood southwest of Gaza City. The local civil defense agency said the attack did not result in injuries.

Israeli fighter jets also struck a house in the Nuseirat refugee camp in central Gaza, killing five Palestinians, according to medical sources cited by Anadolu.