Oil spray at three-month high as demand surges

Nov 8 (Reuters) – Oil prices were under pressure on Wednesday after falling to a more than three-month low in the previous session, with worries over slowing demand in the U.S. and China.

Brent crude was down 8 cents at $81.53 a barrel by 0914 GMT, while U.S. crude lost 20 cents at $77.17. Both fell to their lowest since July 24 on Tuesday.

“The market is clearly unconcerned about the potential for Middle East supply disruptions and is instead focused on easing the balance,” ING analysts Warren Patterson and Eva Manthe said in a note to clients, citing tight crude supply conditions.

The U.S. Energy Information Administration (EIA) said Tuesday that U.S. crude oil production will rise slightly less than previously expected, but demand will fall.

The EIA now expects total U.S. petroleum consumption to fall by 300,000 barrels per day (bpd), reversing its previous forecast of a 100,000 bpd increase.

U.S. crude stocks rose nearly 12 million barrels last week, market sources said late on Tuesday, citing U.S. Petroleum Institute data.

The EIA will delay the release of weekly inventory data until the week of November 13.

Data from China, the world’s biggest crude oil importer, showed its exports of total goods and services shrank faster than expected, amid fears of weakening global demand.

It’s a “struggling domestic and global economy, which adversely affects the oil balance,” said Thomas Varga of oil broker PVM.

However, China’s October crude oil imports showed strong growth and its central bank governor said on Wednesday that the world’s second-largest economy is expected to meet its GDP growth target this year. Beijing is targeting growth of around 5% this year.

Tempering supply concerns, analysts at Goldman Sachs estimated that seaborne net oil exports of the six countries from the oil producer group OPEC would be only 0.6 million bpd below April levels. OPEC has announced overall production cuts of 2 million bpd from April 2023.

OPEC expects the global economy to grow and increase fuel demand despite economic challenges including high inflation and interest rates.

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