Oil prices remained stable on Friday, but they are poised for a fourth consecutive weekly decline as indications of sluggish global fuel demand outweigh concerns about potential supply interruptions in the Middle East.
By 1040 GMT, Brent crude futures rose by 18 cents, equivalent to 0.2%, reaching $79.70 a barrel. Similarly, U.S. West Texas Intermediate crude futures increased by 16 cents, or 0.2%, to $76.47. Over the past four weeks, both benchmarks have experienced a decline of over 7%, marking the longest stretch of weekly losses observed this year.
“Signs of sluggish economic growth in key markets could dampen oil demand, despite the rising tensions in the Middle East that threaten supply chains,” noted Ashley Kelty, an analyst at Panmure Liberum.
Recent economic figures from China, the world’s leading oil importer, alongside surveys reflecting weaker manufacturing activity throughout Asia, Europe, and the United States, have raised alarms about the potential for a slow global economic recovery likely to impact oil consumption. The drop in manufacturing activity in China has compounded concerns, particularly after June’s data revealed imports and refinery operations were down compared to the previous year.
According to LSEG Oil Research, Asia’s crude oil imports in July hit a two-year low, driven by diminished demand from both China and India.
On Thursday, an OPEC+ meeting concluded without any changes to the group’s oil output policy, including plans to gradually lift one layer of production cuts starting in October.
“Crude futures saw a slight uptick early on Friday, but ongoing concerns about demand are overshadowing fears related to supply that have been exacerbated by rising geopolitical tensions in the Middle East,” stated Vandana Hari, the founder of analysis firm Vanda Insights.
Investors in the oil market are also keeping an eye on the evolving situation in the Middle East, where the deaths of senior leaders from Iran-aligned militant groups Hamas and Hezbollah have fueled fears of a potential escalation into all-out conflict, further jeopardizing supply stability. Following an Israeli strike that killed its top military commander, Lebanon’s Hezbollah indicated that its conflict with Israel had entered a new phase and promised a response.
