Oil prices fell to their lowest levels in weeks as trading softened on weak data from the US and China and signs of increased supply.
Oil prices eased on Friday, settling at their lowest levels since late June, as weak economic data from the United States and China renewed concerns about global demand, while signs of rising supply added further pressure to the markets.
Brent crude futures fell by $0.74 (1.1%) to close at $68.44 per barrel, while US West Texas Intermediate (WTI) dropped by $0.87 (1.3%) to settle at $65.16. These were the lowest closing levels for Brent since July 4 and for WTI since June 30. Over the week, Brent declined by around 1%, and WTI lost approximately 3%.
Economic worries from the US and China weigh heavily
In the US, orders for core capital goods unexpectedly declined in June, while shipments only rose moderately. The data indicated a significant slowdown in business investment during the second quarter. Meanwhile, in China, fiscal revenues contracted by 0.3% in the first half of the year.
Despite these concerns, investors drew some optimism from potential trade breakthroughs. Hopes for improved US trade relations with the European Union and Japan are viewed as a possible future support for global growth and energy demand.
Supply pressure intensifies from Venezuela and OPEC+
Adding to the bearish sentiment, the United States is reportedly preparing to allow energy firms, beginning with Chevron, to resume limited operations in Venezuela. This move could increase Venezuelan oil exports by over 200,000 barrels per day, helping ease tightness in the heavy crude market.
At the same time, OPEC and its allies, collectively known as OPEC+, are expected to raise oil production. The group is reportedly seeking to regain market share amid strong summer demand, with increases planned through August and possibly into September.
Mixed signals and cautious market sentiment
US crude inventories fell by over 3 million barrels last week, exceeding expectations. However, a sharp increase in distillate stockpiles has raised questions about the pace of diesel and heating oil demand recovery.
Meanwhile, US oil producers continue to exercise caution. The number of active oil drilling rigs has declined for the 12th time in 13 weeks, now standing at its lowest level since 2021. The trend reflects ongoing uncertainty about price stability and future demand.
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