Oil prices dip as markets struggle to recover from recent losses

(MENAFN) Oil prices dipped on Thursday as markets struggled to recover from recent losses driven by recession fears, which had triggered a global market downturn. However, the decline was tempered by signs of strong demand in the US, growing expectations that major central banks might soon reduce interest rates, and escalating geopolitical tensions in the Middle East.

Brent crude, the international benchmark, traded at USD78.16 per barrel at 10:06 a.m. local time (0706 GMT), down 0.2 percent from the previous session's close of USD78.33. Meanwhile, the American benchmark, West Texas Intermediate (WTI), was priced at USD75.16 per barrel, a slight decrease of 0.1 percent from the previous close of USD75.23.

The downturn in oil prices was further influenced by weak corporate earnings reports, which added to the recession concerns already heightened by data from the previous week's US employment report. Analysts pointed out that the forthcoming weekly unemployment benefit claims data, expected later in the day, could offer further insights into the US labor market and potentially sway market directions.

Despite these concerns, the drop in US crude oil inventories provided some support to prices, suggesting rising demand. According to the Energy Information Administration (EIA), US commercial crude oil inventories fell by approximately 3.7 million barrels to 429.3 million barrels, surpassing market expectations of a 1.6-million-barrel decline. Nonetheless, uncertainty over the timing of interest rate cuts by the Federal Reserve continues to weigh on the market, with the likelihood of a 50 basis point cut now exceeding 70 percent.

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