Oil prices showed signs of recovery on Thursday after a recent slump to a six-month low, with Brent crude oil appreciating by 1% to $75.06 a barrel while the U.S. West Texas Intermediate crude oil also rose by 1% to $70.05 a barrel.
However, investor concerns persist over sluggish demand in both the United States and China.
The market’s unease was triggered by data indicating that U.S. oil output remains close to record highs despite falling inventories.
U.S. gasoline stocks rose unexpectedly by 5.4 million barrels to 223.6 million barrels, adding to the apprehension.
China, the world’s largest oil importer, also contributed to market jitters as crude oil imports in November dropped by 9% from the previous year.
High inventory levels, weak economic indicators, and reduced orders from independent refiners were cited as factors weakening demand.
Moody’s recent warnings on credit downgrades for Hong Kong, Macau, Chinese state-owned firms, and banks further fueled concerns about China’s economic stability.
Oil prices have experienced a 10% decline since OPEC+ announced voluntary output cuts of 2.2 million barrels per day for the first quarter of the next year.
In response to falling prices, OPEC+ member Algeria stated that it would consider extending or deepening oil supply cuts.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman met to discuss further oil price cooperation, potentially boosting market confidence in the effectiveness of output cuts.
Russia, part of OPEC+, pledged increased transparency regarding fuel refining and exports, addressing concerns about undisclosed fuel shipments.
