Oil futures lost ground Thursday, under pressure after minutes of the Federal Reserve’s last meeting and U.S. petroleum inventory data underlined concerns about the outlook for demand.
West Texas Intermediate crude for September delivery CL.1, -0.88% declined 38 cents, or 0.9%, to $42.73 a barrel, while October WTI CLV20, -0.85%, the most actively traded contract, fell 37 cents, or 0.9%, to $42.75 on the New York Mercantile Exchange. The global benchmark, October Brent crude BRNV20, -0.92%, dropped 41 cents, or 0.9%, to $44.96 a barrel on ICE Futures Europe.
“Oil prices are coming off a little as sentiment takes a dip, the Fed highlights outlook risks and the dollar bounces back,” said Craig Erlam, senior market analyst at Oanda.
Crude futures remained lower after data showed the number of first-time U.S. weekly jobless claims rose back above 1 million last week.
Minutes of the Fed’s July 28-29 meeting released Wednesday afternoon said staff economists told policy makers they were lowering their estimate for economic growth over the second half of the year.
Meanwhile, a meeting of the OPEC+ alliance’s Joint Ministerial Monitoring Committee on Wednesday offered no surprises, with ministers maintaining output cuts of 7.7 million barrels a day, but emphasizing the need for countries that failed to cut enough in previous months to make compensatory reductions this month and next.
Support in Wednesday’s session was also tied to weekly inventory data from the Energy Information Administration, which said U.S. crude inventories last week fell by 1.6 million barrels, while gasoline inventories were down 3.3 million barrels. Oil had been under pressure after the American Petroleum Institute late Tuesday reported a rise in gasoline inventories, which would be a bearish sign in the final stretch of summer driving season. The EIA said distillate inventories rose by 200,000 barrels.
But the data didn’t dispel worries about demand as the economy continues to wrestle with the COVID-19 pandemic.
Gasoline demand fell to 8.6 million barrels a day, remaining around 10% lower than in previous years, wrote analysts at Commerzbank. The fall in gasoline inventories was presumably due not only to a fall in gasoline production but also a fall in gasoline imports, that dropped by almost half to 557,000 barrels a day, they said.
September natural-gas futures NGU20, -0.28% were little changed at $2.425 per million British thermal units as traders wait for weekly storage data from the EIA. Analysts surveyed by S&P Global Platts, on average, look for the EIA storage data to show an injection of 39 billion cubic feet in the week ended Aug. 14.