Investing.com-- Oil prices fell in Asian trade on Thursday as sentiment towards top crude importer China showed little signs of improvement, while focus turned to upcoming U.S. growth and inflation readings for more economic cues.
Markets were also watching for any more progress in a Israel-Hamas ceasefire.
Prices remained close to two-month lows, as data showing a drop in U.S. inventories only offered limited relief to oil markets. Fears of supply disruptions due to wildfires in Canada’s Alberta province, also provided fleeting support.
Concerns over waning demand, coupled with forecasts of a potential oil market surplus in 2025, kept traders largely bearish towards crude. A broader rout in commodity prices also limited buying into oil.
Brent oil futures expiring in September fell 0.5% to $81.26 a barrel, while West Texas Intermediate crude futures fell 0.6% to $76.24 a barrel by 22:01 ET (02:01 GMT).
US GDP, PCE inflation awaited for more economic cues
Focus was squarely on upcoming U.S. gross domestic product data, which is due later on Thursday. The reading will be closely watched for any more signs that the U.S. economy is cooling, which could bode poorly for crude demand.
PCE price index data- which is the Federal Reserve’s preferred inflation gauge- is due this Friday, and is likely to factor into the central bank’s outlook on interest rates.
The readings come just days before a Fed meeting next week, where the central bank is widely expected to keep rates unchanged. But markets will be watching for any cues on when the bank plans to begin cutting rates, with general consensus pointing to a September easing.
China demand remains a point of concern
Concerns over Chinese demand remained in play, after the world’s biggest oil importer clocked disappointing growth figures for the second quarter. China’s oil imports also sank in June.
The readings, coupled with scant cues on more stimulus measures from Beijing, kept sentiment over China largely constrained.
An unexpected interest rate cut by the People’s Bank did little to improve sentiment.
Uncertainty over the U.S. presidential race also dented sentiment towards China, amid doubts over just what a change in U.S. administration will entail for Washington’s stance towards Beijing.