Oil Slips As Investor Concerns Grow Around US Economy

Benchmark Brent crude prices edged lower 0.2% to $66.17 per barrel, while U.S. West Texas Intermediate prices fell 0.5% to $62.06 per barrel at 4.06 a.m. ET.

Oil prices slipped on Friday as risks of oversupply and tepid demand in the U.S. continued to rise, offsetting geopolitical concerns.

Benchmark Brent crude prices edged lower 0.2% to $66.17 per barrel, while U.S. West Texas Intermediate prices fell 0.5% to $62.06 per barrel at 4.06 a.m. ET. Retail sentiment on Stocktwits about the United States Oil Fund (USO) was in the ‘bullish’ territory at the time of writing.

A report from the Bureau of Labor Statistics showed that consumer inflation rose by the most in seven months, and first-time applications for unemployment benefits spiked last week. The figures raised concerns around crude demand in the world’s top oil consumer. U.S. Energy Information Administration data showed that crude stockpiles in the U.S. went up last week by 3.9 million barrels to 424.6 million barrels.

Traders were spooked further after the International Energy Agency's data showed that the world's oil supply would rise more rapidly than expected this year, as OPEC+ plans to bolster output. The producer group, led by Saudi Arabia, said on Sunday that it will raise October output by 137,000 barrels per day. OPEC+ has already brought back 2.2 million barrels per day of production as Riyadh seeks to regain market share.

"The (U.S.) inflation battle doesn't quite look won, which dampens the demand outlook for oil from the world's largest economy," said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, according to a Reuters report.

However, oil prices could get a lift as Ukraine stepped up attacks on Russian energy infrastructure, once again. According to a Bloomberg News report, Ukrainian drones attacked Primorsk, Russia’s primary oil-loading terminal on the Baltic coast. Last month, the port terminal reportedly loaded about 330,000 bpd of diesel-type fuel.

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