Oil prices fell on Thursday, paring some of the previous day's gains, as investors took profits on concerns of further interest rate hikes dampening economic growth and global fuel demand while weak economic data in China also weighed on sentiment.
"The market turned around on renewed worries about further rate hikes in the U.S. and Europe, which will reduce global oil demand," said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
Adding to pressure, annual profits at industrial firms in China, the world's second-biggest oil consumer, extended a double-digit decline in the first five months as softening demand squeezed margins.
Brent's six-month backwardation - a price structure whereby sooner-loading contracts trade at higher prices than later-loading ones - reached its lowest since December, but still indicated higher demand for immediate delivery.
"Behind the backwardation is the expectation that the immediate demand for fuels will stay firm as the United States has entered the driving season, but the global economy will slow down toward the second half of this year, reducing oil demand," NS Trading's Kikukawa said.
Persons:
paring, Brent, Hiroyuki Kikukawa, Jerome Powell, Christine Lagarde, Tetsu Emori, Kikukawa
Organizations:
TotalEnergies, . West Texas, U.S . Energy Information Administration, NS, Nissan Securities, U.S . Federal, European Central Bank, Emori Fund Management Inc
Locations:
Leuna, Germany, China, U.S, Europe, Saudi Arabia, OPEC, United States