What is behind the decline in fuel oil prices in the world market?

Last Updated on July 27, 2024 9:43 am

Due to reduced demand in China, the price of fuel oil has decreased in the world market. According to the US Energy Information Administration, the country produced 3.7 million barrels less crude oil last week.

Demand for crude oil has fallen as economic growth in China, a major importer, has been hampered, Reuters reported on Thursday. It is believed that due to the recent decrease in the demand of oil in the country, its price has been affected in the world market.

According to the information, the price of Brent crude for next September has been reduced by 59 cents or 0.7 percent to 81 dollars 12 cents per barrel. Also, US West Texas Intermediate crude was down 61 cents, or 0.8 percent, at $76.98.

The US Energy Information Administration also reported that the country produced 3.7 million barrels less crude oil last week. Gasoline stockpiles in the country fell by 5.6 million barrels. Distillate stocks fell by 2.8 million barrels.

Oil prices rose slightly on Thursday and Friday as the US economy performed better than expected in the second quarter. However, both the benchmark prices have fallen by 5 percent in the last three weeks. Brent is selling slightly lower this week. In this case, West Texas Intermediate prices fell by more than two percent.

Demand in China fell 8.1 percent in June to 13.66 million barrels per day, according to the data. Analysts said that mainly because of petrol and diesel, the demand in China has decreased. Because the use of electric vehicles has increased in the country.

Moreover, there is a hope that the Gaza war will end. For this reason, strong discussions are going on in the United States. A ceasefire agreement may normalize the situation in the Middle East. This is expected to increase fuel extraction.