Investing.com — Oil prices fell lower on Thursday, giving up geopolitical gains, amid concerns that slowing U.S. economic growth will hit demand for crude.
to extend last session’s sharp recovery in the uplifted Middle East following the assassination of a Hamas leader in Iran, as a group of top producers meets to discuss production levels.
At 2:30 PM ET (18:30 GMT), the price was down 1.7% at $79.82 per barrel, while rising 1.7% to $76.62 per barrel.
Weaker US economic data takes center stage
A pair of economic reports showing a larger-than-expected increase in initial jobless claims and a further deterioration in U.S. manufacturing in contraction territory
Initial jobless claims rose to 249,000 for the week ending July 27, higher than expected, while the ISM Manufacturing Index for July came in at 46.8, below the forecast of 48.2.
“The 16-month streak of sub-50 readings spanning November 2022 through March 2024 was the longest streak of contraction since August 2000-January 2002 (18 months), notably exceeding the decline around the Great Financial Crisis ” said Jefferies. a note.
Concerns about a downturn in the US economy fueled fears that demand would offset the recent geopolitical risk premium priced into oil prices amid rising tensions in the Middle East.
Fears between Israel and Hamas take center stage after Haniyeh’s murder
The crude oil risk premium has recently risen on concerns about Hamas’s retaliation against Israel for the assassination of its leader Ismail Haniyeh in Tehran on Wednesday.
Israel did not claim responsibility for the attack, but it was widely believed that Jerusalem had carried out the attack.
The killing raised concerns of a wider war in the Middle East, potentially disrupting oil supplies from the region, especially due to possible retaliation from Hamas and heightened tensions with Iran as the attack took place in the capital.
Israel continued its offensive in Gaza and this week also traded rocket attacks with the Iran-backed Lebanese group Hezbollah.
The OPEC+ committee meets, few changes are expected
OPEC+’s Joint Ministerial Monitoring Committee will hold an online meeting on Thursday.
Media reports ahead of the meeting indicated that there were no changes in the cartel’s output, despite a recent drop in oil prices that sent it to a near two-month low.
But top producers Saudi Arabia and Russia are expected to further downplay plans to scale back production cuts.
Concerns about China persist
Oil price sentiment was also worsened by continued concerns about an economic recovery in top importer China, especially after a series of weak purchasing managers’ index data this week.
data showed an unexpected contraction in China’s manufacturing sector, in line with a figure on Wednesday.
The figures fueled calls for more stimulus from Beijing, which has so far provided few concrete details on plans to support the economy.
(Peter Nurse, Ambar Warrick contributed to this item.)
