Oil falls as much as 1% on concerns over supply rise later in 2024 | Business

Ammon News – Oil prices fell as much as 1 percent in Asian trade on Tuesday, extending losses from the previous session’s four-month low, as investors worried about rising supply later in the year amid signs of weakening demand in US.

Brent crude futures were down 73 cents, or 0.93 percent, at $77.63 a barrel by 0638 GMT. Brent closed below $80 for the first time since February 7, after falling more than 3% on Monday.

U.S. West Texas Intermediate crude futures were down 87 cents, or 1.17 percent, at $73.35 a barrel. It also settled near a four-month low on Monday after falling 3.6%.

The Organization of the Petroleum Exporting Countries and its Russia-led allies, known together as OPEC+, agreed on Sunday to extend most of the oil output cuts until 2025, but left room for voluntary cuts from eight members due to be phased out starting in October.

“Oil prices have faced a double whammy of late, with the supply story being weighed down by OPEC+ guidance to start easing some production cuts from October 2024, while demand conditions have not been well supported by production activity in US weaker than expected,” IG. Market strategist Yeap Jun Rong said in an email.

U.S. manufacturing activity slowed for a second straight month in May, with construction spending unexpectedly falling for a second month in April as non-residential activity fell — both of which could translate into weaker demand for oil and combustible.

“With the ‘bad news is bad news’ mantra, further economic weakness on display may send oil prices lower, potentially paving the way for a retest of the lower bound of its one-month range at the $72.00 level,” Yeap said . .

Signs of weakening demand growth have weighed on oil prices in recent months, with U.S. fuel consumption data in focus. The average price of gasoline in the United States fell 5.8 cents a gallon to $3.50 a gallon on Monday, according to GasBuddy data.

The US government will release data on inventory and supplies on Wednesday.

The supplied product, considered an indicator of demand, will show how much gas was consumed over Memorial Day weekend, the start of the US driving season.

Concerns about these macroeconomic factors from the world’s top oil consumer will likely continue to drive prices in the near term, some analysts say.

“The broader market is increasingly concerned about the US consumer, US end-user oil demand (indicators that suffered from data accuracy in May but remain disappointing) and its global implications,” he Sparta Commodities analyst Neil Crosby said in an article. weekly client note.

Reuters