SINGAPORE- Oil prices slipped in Asian trade on Thursday as fears of a sluggish demand recovery in the world’s top crude importer China offset the prospect of tighter supply, with top exporters Saudi Arabia and Russia cutting output.
Brent crude futures dipped 25 cents, or 0.3 percent, to $76.40 a barrel, after settling higher 0.5 percent the previous day.
US West Texas Intermediate crude fell 7 cents, or 0.1 percent, to $71.72 a barrel, after closing 2.9 percent higher in post-holiday trade on Wednesday to catch up with Brent’s gains earlier in the week.
“Despite calls for supply cuts over past months, oil prices have largely remained locked within a ranging pattern as lingering caution around the demand outlook continues to put a cap on the upside,” said Yeap Jun Rong, market strategist at IG.
“Near-term, a move above the key $80.00 level may be needed to provide some conviction for the bulls,” Yeap added.
Demand concerns lingered over China’s slow economic recovery after the lifting of pandemic restrictions, on top of global macroeconomic headwinds and interest rate hikes by central banks.
Weighing on the demand outlook, China’s services activity expanded at the slowest pace in five months in June, a private-sector survey showed on Wednesday, as weakening demand weighed on post-pandemic recovery momentum.
“The upside looks to be limited due to uncertainty over the pace of China’s economic growth and fuel demand recovery,” said Tatsufumi Okoshi, senior economist at Nomura Securities, predicting WTI would remain in a range of $65 to $75 a barrel going forward.
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