Oil prices eased on Thursday as an uncertain economic outlook for China outweighed expectations of tighter supplies as a result of extended supply cuts by Saudi Arabia and Russia.
Brent crude futures fell 42c, or 0.5%, to $90.18 a barrel by 10.29am GMT, while West Texas Intermediate fell 52c, or 0.6% to $87.02.
Both benchmarks spiked earlier in the week after Saudi Arabia and Russia, the top two oil exporters, extended voluntary supply cuts to the end of the year. Those were in addition to cuts agreed by several Opec+ producers in April that run to the end of 2024.
Investors also digested mixed data from China. Overall exports fell 8.8% in August year on year and imports contracted 7.3%, but crude imports surged 30.9%.
“The wind has been taken out of the bulls’ sails overnight by rising Chinese product exports last month, albeit crude oil imports rose,” PVM Oil analyst Tamas Varga said.
Concerns about rising oil output from Iran and Venezuela, which could balance out a portion on cuts from Saudi and Russia, also kept a lid on the market.
“At present, it is really difficult for us to see any negative factors due to supply constraints,” said CMC Markets’ Shanghai-based analyst Leon Li.
“However, we need to consider possible demand risks, such as in the fourth quarter [when] the market could slow into an off-peak season for oil consumption after summer demand ends.”
Helping support prices, US crude oil inventories were projected to have fallen by 5.5-million barrels in the week ending September 1, according to market sources citing American Petroleum Institute figures.
Official inventory data from the US Energy Information Administration is due at 3pm GMT.