Oil prices fall on signs of easing summer demand amid slight draw in crude stocks By Investing.com
Investing.com – Oil prices fell on Wednesday, paring recent gains despite higher U.S. commodity withdrawals, tensions in the Middle East and supply disruptions in Libya.
At 09:00 ET (13:00 GMT), it was down 0.9% to $77.92 a barrel, while it was down 0.9% to $74.86 a barrel.
Continued concerns about slowing Chinese demand, coupled with heightened risks of a broader recession, have weighed on the crude market for much of this month, and this led to some degree of profit-taking on Wednesday after a gain of around 7% at the end of last week on expectations that the US Federal Reserve will soon begin reduce interest rates.
US inventories shrink more than expected – API
The profit-taking came even after data from US crude oil inventories showed a draw of 3.4 million barrels in the week to August 23, which exceeded expectations for a draw of 3 million barrels.
The data also showed a continued draw in gasoline and distillate stockpiles.
API data usually announces similar readings from , which should be expected later on Wednesday.
U.S. inventories have fallen in eight of the past nine weeks, raising hopes that demand in the world's largest oil market remains strong despite recent signs of a cooling economy.
But September marks the end of the heavy summer season, which saw some cooling in US gasoline demand.
Middle East, Libya is at risk of buoy crude
Geopolitical risks have also seen traders attach a higher risk premium to oil.
Libya in particular was the focus of markets, after the eastern country's authorities reportedly halted oil production amid a growing crisis over the leadership of Libya's Central Bank.
The central bank is Libya's only internationally recognized oil deposit, and is at the center of a conflict between western and eastern factions.
Libya produced an estimated 1.2 million barrels per day of crude oil in July, with any disruption in output heralding a tightening of global markets.
In the Middle East, tensions between Israel and Hamas showed signs of easing after weekend peace talks failed to produce an agreement. Israel and Hezbollah have attacked each other again in the past few days.
(Ambar Warrick contributed to this article.)
