Oil futures continue to fall amid US recession fears, weak demand

(MENAFN) Oil futures experienced a continued decline in a volatile trading session on Tuesday, as investor anxiety over a potential U.S. recession overshadowed concerns about escalating tensions in the Middle East, which could impact oil supplies from the major producing region. The market's uncertainty was reflected in the drop in Brent crude futures, which fell by USD1.07, or 1.4 percent, settling at USD75.74 per barrel, nearing their lowest levels since January. Similarly, West Texas Intermediate (WTI) crude futures decreased by USD1.18, or 1.6 percent, reaching USD72.34 per barrel.

The market's current weakness is primarily driven by fears of a U.S. recession, exacerbated by a disappointing July jobs report that has raised concerns about the broader economic outlook. Additionally, ongoing worries about diminished demand from China, a key player in global oil consumption, have put further downward pressure on oil prices. The decline in diesel consumption in China, a significant contributor to the growth in global oil demand, has been particularly influential in this trend.

Further compounding the situation, oil prices are also feeling the effects of OPEC+'s decision to proceed with its plan to gradually end voluntary production cuts starting in October. This anticipated increase in supply later in the year adds to the bearish sentiment in the market, as analysts anticipate that rising production will weigh on prices amid already subdued demand forecasts.

MENAFN06082024000045015682ID1108521428