OILFIELDS: Natural gas flares are seen at an oil pump site outside Williston, North Dakota, in this March 11 2013 file photo. Picture: REUTERS
OILFIELDS: Natural gas flares are seen at an oil pump site outside Williston, North Dakota, in this March 11 2013 file photo. Picture: REUTERS

Singapore — Oil prices fell on Thursday, reversing some of the strong gains from the previous session, as economic concerns raised doubts about fuel demand growth.

US West Texas Intermediate (WTI) crude futures were at $69.91 a barrel at 2.20am GMT, down 46c, or 0.6%, from their last settlement.

Brent crude futures slipped 38c, or 0.5%, to $79.36 a barrel.

The falls came as a result of a potential slowdown in fuel demand growth because of trade disputes between the US and China as well as emerging-market turmoil.

American companies in China are being hurt by tariffs in the growing trade war between Washington and Beijing, according to a survey of hundreds of firms, prompting the US business lobbies behind the poll to urge the Trump administration to reconsider its approach.

The Trump administration has invited Chinese officials to restart trade talks, just as Washington prepares to escalate the US-China trade war with tariffs on $200bn worth of Chinese goods.

Oil cartel Opec on Wednesday reduced its forecast for 2019 global oil demand growth, pointing to economic risks.

In its monthly report, Opec said world oil demand in 2019 would rise by 1.41-million barrels a day, 20,000bbl/day less than August and the second consecutive reduction in the forecast.

Tighter supply

Despite this, the short-term outlook for oil markets is for tighter supply.

Brent rose above $80 a barrel the previous session for the first time since May, spurred by the expectation that US sanctions against Iran’s oil exports, which will start in November, will tighten global markets.

WTI was pushed over $70 the previous session due to falling crude inventory and production levels.

US crude inventories fell 5.3-million barrels in the week to September 7 to 396.2-million barrels, the lowest since February 2015 and about 3% below the five-year average for this time of year, the US Energy Information Administration (EIA) said on Wednesday.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said the inventory data showed "a much deeper drop than analysts’ expectations".

US crude oil production fell by 100,000bbl/day, to 10.9-million barrels a day, as the industry faces pipeline capacity constraints.

Innes said the slight dips on Thursday came as rising refined product inventories, which the Energy Information Administration also reported, "slightly dampened market overexuberance" as it indicated that US fuel demand may be weakening.

Petrol stocks rose 1.3-million barrels, while distillate stockpiles, which include diesel and heating oil, climbed by 6.2-million barrels, the Energy Information Administration data showed.