Oil rates drop on data signaling slowdown in US economic activity
(MENAFN) Oil rates fell on Thursday, influenced by data suggesting a slowdown in US economic activity, despite a decline in the nation's commercial crude oil inventories and oil production.
At 9:58 a.m. local time (0658GMT), international benchmark brent crude was trading at USD86.66 per barrel, marking a 0.78 percent decrease from the previous session's closing price of USD87.34 per barrel. Similarly, the American benchmark West Texas Intermediate (WTI) traded at USD83.13 per barrel, down 0.89 percent from its previous closing price of USD83.88 per barrel.
The decline in oil prices was triggered by early Asian trade reactions to US macroeconomic data released on Wednesday. This data indicated weaker-than-expected economic growth, with private payrolls increasing by only 150,000 in June—falling short of market expectations—and annual wage growth slowing to 4.9 percent, the lowest since August 2021.
Additionally, the number of initial unemployment benefit claims in the US rose by 4,000 to 238,000 for the week ending June 29, surpassing expectations and adding to concerns about economic health in the world's largest oil consumer.
These economic indicators heightened market players' demand concerns, exerting downward pressure on oil prices. However, the release of official statistics from the Energy Information Administration (EIA) late Wednesday provided some positive news, limiting the price losses.
The EIA reported that US commercial crude oil stocks fell by approximately 12.2 million barrels to 448.5 million barrels, significantly exceeding the market's estimate of a 400,000-barrel decline. This positive demand outlook from the EIA helped to moderate the overall decline in oil prices.
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