Oil prices down with lower global demand expectations

By Firdevs Yuksel

ISTANBUL (AA) - Oil prices decreased on Thursday over demand worries as weak economic data from key economies sparked concerns over the global economy.

International benchmark Brent crude traded at $82.81 per barrel at 10.03 a.m. local time (0703 GMT), a 0.48% fall from the closing price on Wednesday of $83.21 per barrel.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $78.47 per barrel, down 0.53% from the previous session close of $78.89 per barrel.

Driven by bearish economic data from key economies, oil prices slumped on Wednesday and extended their losses on Thursday.

The manufacturing PMI in the US fell to 47 from 49 in July, while service sector business activity growth was the slowest since February at 51 in August.

Business activity in the eurozone declined more than expected, while Britain's economy looked set to shrink this quarter.

Expectations of further interest rate hikes in the US supported the decline in oil prices. Investors fear that higher US rates could potentially hurt oil demand in the world's largest oil consumer.

Markets await more signals on US monetary policy from the Jackson Hole Symposium on Friday.

Meanwhile, data released by the US Energy Information Administration (EIA) on Wednesday showed that commercial crude oil inventories in the country decreased by 6.1 million barrels during the week ending Aug. 18.

The fall in inventory, which was higher than the American Petroleum Institute's expectation of a drop of 2.42 million barrels, reflected strong demand in the world's top oil-consuming country.

However, US gasoline inventories rose by around 1.5 million barrels during the same week, signaling a probable drop in demand towards the end of the summer travel season.

Moreover, tight global supply concerns after output curbs from OPEC+ countries, Saudi Arabia and Russia are still keeping oil prices trading close to their highest levels of this year.