Brent futures settled down $3.76, or 4.6 per cent, to $77.42 a barrel and U.S. WTI lost $3.76, or 4.9 per cent, to $72.90
Oil prices declined around 5 per cent on Thursday to their lowest in four months, as investors worried about global oil demand after weak data from the U.S. and Asia.
Brent futures settled down $3.76, or 4.6 per cent, to $77.42 a barrel. U.S. West Texas Intermediate crude (WTI) lost $3.76, or 4.9 per cent, to $72.90. Both Brent and WTI earlier traded at their lowest since July 7, at $76.60 and $72.16, respectively.
Both West Texas Intermediate and Brent’s front-month contracts also traded below later-dated contracts, a structure known as contango.
The mood is negative, the charts are negative, said Phil Flynn, an analyst at Price Futures Group. It is going to take something to change that mood, and until then people will ride it down until they realize it’s overdone.
The number of Americans filing new claims for unemployment benefits rose to a three-month high last week, indicating that labour market conditions continued to ease.
The report came after other data that showed U.S. retail sales dropped for the first time in seven months in October as motor vehicle purchases and spending on hobbies declined. This indicated slowing demand at the start of Q4 that further bolstered expectations the Fed is done hiking interest rates.
OPEC and the International Energy Agency (IEA) have both forecasted supply tightness in Q4, but U.S. data on Wednesday showed inventories were abundant.
In the meantime, an expected slowdown in Chinese oil refinery throughput also gave investors pause. Runs eased in October from the previous month’s highs as industrial fuel demand weakened and refining margins dropped.
Still, Chinese economic activity rallied in October as industrial output rose at a faster pace and retail sales growth beat expectations.
The current price decline is taking place amid a seemingly auspicious backdrop, which indicates that investors simply do not buy into the ‘Q4 stock draw’ narrative; something that is not backed up by the recent weekly EIA reports either, said Tamas Varga of oil broker PVM.
