Oil prices were steady on Thursday as worries about oversupply and weakening U.S. demand balanced against geopolitical tensions in the Middle East and the ongoing war in Ukraine.
Brent crude slipped 13 cents, or 0.2%, to $67.36 a barrel by 07:29 GMT, while U.S. West Texas Intermediate (WTI) fell 17 cents, or 0.3%, to $63.50. The slight declines followed gains of more than $1 per barrel on Wednesday, after Israel’s strike on Hamas leadership in Qatar and NATO air defenses intercepted suspected Russian drones entering Poland during attacks on western Ukraine.
Despite recent support from conflict-driven risk, analysts say oversupply remains the dominant market theme. Tamas Varga of PVM Oil Associates noted that sanctions on Russian crude buyers like China and India could tighten supply, though for now such measures remain rhetoric.
Adding to supply pressure, U.S. crude inventories rose by 3.9 million barrels in the week to September 5, defying expectations of a 1 million barrel draw, according to the Energy Information Administration. At the same time, OPEC+ confirmed plans to raise output starting in October, a move expected to weigh on prices further as inventories build.
On the demand side, softer U.S. economic data has raised expectations of a Federal Reserve rate cut next week. Traders remain cautious ahead of the latest U.S. inflation report, with concerns that a stronger-than-expected CPI reading could shake rate cut bets.
Although oil prices have recovered from early September lows, analysts warn that rising production and weaker demand will likely lead to more significant declines in the months ahead.
