WTI crude oil fell toward $84 per barrel on Thursday, extending losses from the previous session as a weakening demand outlook took center stage again after geopolitical tensions eased. Investors fretted about a gloomy economic outlook, with JPMorgan projecting that the US will enter a mild recession next year due to rapid rate rises.
China also continued to grapple with rising Covid cases that clouded the demand outlook in the world’s biggest crude importer. Oil prices declined as well after NATO cleared Russia of the missile attack in Poland, allaying fears of a wider conflict in Europe.
On the supply side, flows through the Druzhba pipeline which carries Russian oil to Hungary had resumed following a brief power disruption. Still, traders remained cautious about the supply outlook as the European Union is set to ban Russian crude flows from December, while OPEC is expected to keep supply tight.
While Gasoline futures extended losses to below $2.5 per gallon in mid-November, the lowest in almost four weeks, after a higher-than-expected build in inventories rattled investors.
The latest EIA data showed that US gasoline stocks rose by 2.207 million barrels to 207.9 million last week, after fourth consecutive weekly drops, and way more than market expectations of a 0.31-million-barrel increase.
Also, gasoline production increased for the fifth week in a row, up by 0.035 million barrels. In other related news, President Joe Biden has threatened to pursue higher taxes on oil company record profits if the industry does not seek to lower costs for Americans and increase production.