Oil closes down day and accumulates losses of 8% in August

Oil futures contracts extended losses on Wednesday (31), after falling 5% on Tuesday. Economic indicators renew fears about global growth and the impact on demand for the commodity.

In the United States, crude oil inventories fell more than expected, but those of its derivatives did not follow expectations. On the radar are news about the Organization of Petroleum Exporting Countries and allies (OPEC+), which should meet next week.

WTI crude for October closed down 2.28% ($2.09) at $89.55 a barrel on the New York Mercantile Exchange (Nymex), and Brent for November was down 2.25% ( US$2.20), at US$95.64 a barrel, on the Intercontinental Exchange (ICE).

In August, the most liquid contracts accumulated losses of 9.2% and 8%, respectively.

Commodity prices are falling as energy operators are anticipating a “brutal” period for global economic growth, Oanda says in a report. “Factory activity in China remains depressed and another record reading of inflation in the euro zone has raised expectations of a much more aggressive European Central Bank, which could trigger a severe recession”, notes the consultancy.

Data from the US Department of Energy (DoE) was also on the radar. U.S. crude inventories fell by 3 million, nearly three times what was expected, prompting assets to momentarily reduce losses. However, distillate inventories were high and contradict analysts’ expectations of a fall.

In Oanda’s analysis, the result “clearly” shows demand destruction as gasoline demand struggles and crude oil exports see some relief.

Capital Economics expects oil assets to remain under pressure in the coming weeks, particularly with the release of strategic US reserves scheduled for October.

As for OPEC+, its Joint Technical Committee (JTC) predicts a surplus of 900,000 barrels per day (bpd) this year in the oil market, according to a document accessed by Reuters. An increase from the previous forecast of a surplus of 800,000 bpd.