Oil prices have edged down after three straight days of increase, as weaker economic growth predicts renewed worries on demand outlook.
Brent crude slipped 36 cents at $61.31 a barrel, while West Texas Intermediate (WTI) crude fell 35 cents, at $55.88 per barrel, reported Reuters. A surprise fall in US crude stocks and optimism about more efforts to support prices by the Organization of the Petroleum Exporting Countries (OPEC) and its allies was supportive for oil.
On the whole, economic growth concerns remained the key driver for prices.
OANDA senior market analyst Jeffrey Halley was quoted by Reuters as saying: “Slowing global activity will see demand drop, so the reality is that oil rallies will be limited.
“It won’t take much too pull the rug out from under oil’s feet.”
Economists in a poll carried out by the news agency said that a sheer fall in economic growth worldwide remains more likely than a synchronised recovery, even as several central banks shell out monetary easing rounds.
In another Reuters poll, economists noticed that the recent agreement between the US-China trade war is not an economic turning point. Furthermore, the truce has done nothing to reduce the risk that the US could fall into recession in the next couple of years.
Reuters cited RBC Capital Markets in a note to clients as: “The recent slowdown in US data has resurrected talk of US growth ‘catching down’ to the rest of the world.”
The oil price rally was driven by data that highlighted a fall in US crude stocks by 1.7Mbbl last week, which is against analysts’ expectations for an increase of 2.2Mbbl.