Oil prices edge lower as demand concerns outweigh tight supply

Oil prices fell on Thursday for a second straight session, as demand concerns outweighed tight global supply after U.S. government data showed tepid gasoline demand during the peak summer driving season.

Brent crude futures fell 37 cents, or 0.3%, to $106.55 a barrel by 0003 GMT. WTI crude futures fell 33 cents, or 0.3%, to $99.55 a barrel.

Oil prices have been volatile as traders have had to square tighter global supply because of the loss of Russian barrels following the country’s invasion of Ukraine, with recessionary worries that could weaken energy demand.

U.S. gasoline inventories rose 3.5 million barrels last week, government data showed on Wednesday, far exceeding analysts’ forecasts in a Reuters poll for a 71,000-barrel rise. [EIA/S]

Product supplied of gasoline – a proxy for demand – was about 8.5 million barrels per day, or about 7.6% lower than the same time a year ago, the data showed.

“We expect Brent oil futures to fall to US$100/bbl by Q4 2022, implying a modest fall from current levels,” Commonwealth Bank commodities analyst Vivek Dhar said in a note.

In Libya, the National Oil Corp said crude production has resumed at several oilfields, after lifting force majeure on oil exports last week.

However, adding to supply concerns, one of Canada’s major oil export arteries, the Keystone pipeline, was operating at reduced rates for a third day on Wednesday, operator TC Energy said in a statement, as repairs continued on a third-party power facility in South Dakota.

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