U.S. crude oil was above $72 per barrel on Thursday after erasing most of its gains for the year as soft demand in China and worries about the U.S. economy weighed on the market.
The U.S. benchmark is now up just 0.91% for the year, while global benchmark Brent crude has erased all of its gains for 2024.
Oil prices settled more than 1% lower on Wednesday after U.S. job growth was revised significantly lower, renewing concerns about the the strength of the world’s largest economy.
But Daan Struyven, head of oil research at Goldman Sachs, said the demand outlook in China is more worrying for the global market.
Oil demand in China has grown by 200,000 barrels a day in the first half of 2024 compared to the year-ago period, three times below the average growth of 600,000 bpd from 2016 to 2019, Struyven told CNBC.
Here are today’s energy prices:
- West Texas Intermediate October contract: $72.28 per barrel, up 35 cents, or 0.49%. Year to date, U.S. crude oil has gained 0.91%.
- Brent October contract: $76.51 per barrel, up 46 cents, or 0.6%. Year to date, the global benchmark has pulled back 0.67%.
- RBOB Gasoline September contract: $2.21 per gallon, nearly 1 cent higher, or 0.41%. Year to date, gasoline is ahead 5.3%.
- Natural Gas September contract: $2.14 per thousand cubic feet, nearly 3 cents higher, or 1.29%. Year to date, gas is down 14.5%.
The slowdown in China is due in part to drivers switching from gas cars to electric vehicles, and trucks transitioning to liquid natural gas, the analyst said.
“Some of the slowdown is to be expected with slower China GDP growth and the rapid rise in EVs,” Struvyen told CNBC’s “Squawk Box Asia” on Wednesday. But “some of the slowdown is unexpected — this switching to LNG away from diesel,” he said.