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The INA Industrija Nafte oil refinery on the shores of the Adriatic sea in Urinj, Croatia on July 18 2022. Picture: Oliver Bunic/Bloomberg
The INA Industrija Nafte oil refinery on the shores of the Adriatic sea in Urinj, Croatia on July 18 2022. Picture: Oliver Bunic/Bloomberg

Singapore — Oil prices fell on Thursday for a second consecutive session, as demand concerns outweighed tight global supply after US government data showed tepid petrol demand during the peak summer driving season.

Brent crude futures dropped 77c, or 0.7%, to $106.15 a barrel by 4.27am GMT after slipping 0.4% in the previous session. US West Texas Intermediate (WTI) crude futures fell 88c, or 0.9%, to $99.00 a barrel following a 1.9% drop on Wednesday.

Oil prices have been volatile as traders have had to square tighter global supply because of the loss of Russian barrels following the country’s invasion of Ukraine, with recessionary worries that could weaken energy demand.

US petrol inventories rose 3.5-million barrels last week, government data showed on Wednesday, far exceeding analysts’ forecasts in a Reuters poll for a 71,000-barrel rise.

Product supplied of petrol — a proxy for demand — was about 8.5-million barrels a day, or about 7.6% lower than the same time a year ago, the data showed.

“We are in the peak of the peak driving season and demand for gasoline is lagging,” said Stephen Schork, principal at The Schork Report.

ING head of commodities research Warren Patterson said the US inventory data was relatively bearish as petrol stocks rose despite lower refinery runs over the week.

“It seems higher prices are having some impact on demand, with gasoline demand seasonally low over the week once again,” he said.

Concern over Libya’s supplies have also eased as the National Oil Corp (NOC) said on Wednesday crude production had resumed at several oilfields, after lifting force majeure on oil exports last week.

Still, one of Canada’s main oil export arteries, the Keystone pipeline, was operating at reduced rates for a third day on Wednesday, operator TC Energy said in a statement, as repairs continued on a third-party power facility in South Dakota.

“We expect Brent oil futures to fall to US$100 a barrel by the fourth quarter 2022, implying a modest fall from current levels,” Commonwealth Bank commodities analyst Vivek Dhar said in a note.

Reuters

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