Oil prices fell in Asia on Thursday, with investors turning cautious on expectations of lower demand as U.S. employment and business data came in weaker than forecast, signalling the economy of the world’s top oil consumer may be cooling.
Brent crude futures were down 48 cents, or 0.55 per cent, at $86.86 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 51 cents, or 0.62 per cent, to $83.36 by 0342 GMT, with activity thinned by the U.S. Independence Day holiday.
“Geopolitics and weather remain bullish risks, but the underlying physical market strength looks set to turn softer,” said Citi analysts in a client note, adding that physical markets are trading post-summer September cargoes when demand could soften partly due to hurricane risks.
U.S. crude shipments bound for Europe fell to a two-year low in June as European buyers bought cheaper regional and West African oil, though some rebound in purchases in July and August could still happen.
Underscoring the lower demand expectations was data in the United States on Wednesday that showed first-time applications for U.S. unemployment benefits increased last week, while the number of people on jobless rolls rose further to a 2-1/2-year high towards the end of June.