Brent crude oil futures fell 68 cents, or 0.8%, to $85.19 a barrel by 11:07 a.m. ET (1507 GMT). U.S. West Texas Intermediate crude futures were 67 cents, or 0.8%, lower at $83.55. At their session lows, both benchmarks were down more than $1.
“Investors are worried that peak demand for fuel consumption is behind us…. But the market is still going to be undersupplied to the end of the year. It’s searching for an equilibrium,” said Dennis Kissler, senior vice president of trading at BOK Financial.
Oil settled more than $5 lower on Wednesday – its biggest daily drop in over a year, and he said sell off was exaggerated, with heavy hedge fund liquidation on fears that higher interest rates with inflation keep sapping fuel demand.
Prices tumbled on Wednesday even after a meeting of a ministerial panel of OPEC+, the Organization of the Petroleum Exporting Countries and allies led by Russia. It made no changes to the group’s oil output policy, and Saudi Arabia said it would maintain a voluntary cut of 1 million barrels per day (bpd) until the end of 2023, while Russia would keep a 300,000 bpd voluntary export curb until the end of December.
The Kremlin also said there was no deadline on lifting a ban on fuel exports to fight high local gasoline and diesel prices.
“We continue to see the market in deficit through the fourth quarter and the softer prices reduce the probability OPEC will ease supply constraints,” National Australia Bank analysts said. Data on Wednesday also showed a sharp decline in U.S. gasoline demand. Finished motor gasoline supplied, a proxy for demand, fell last week to its lowest since the start of this year, the U.S. Energy Information Administration (EIA) reported.
Other data on Wednesday showed the U.S. services sector slowed while the euro zone economy probably shrank last quarter, according to a survey.
On Thursday, the Turkish energy minister said a crude oil pipeline from Iraq through Turkey, which has been suspended for about six months.
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