Oil prices steady as slowing demand offsets tightening supply

Oil prices were steady in early Asian trade on Wednesday, with global benchmark Brent hovering near the one-month low it hit in the prior session, as signs of weakening demand growth in China clashed with the prospect of declining U.S. oil stockpiles.

Brent crude oil futures fell by 11 cents, or 0.1 per cent, to $83.62 a barrel by 0010 GMT. U.S. West Texas Intermediate crude futures were also 11 cents, or 0.1 per cent, lower at $80.65 a barrel.

Both benchmarks have dropped in the three prior sessions, with Brent crude futures trading as low as $83.30 on Tuesday, the lowest since June 17.

Concerns over demand in China continue to weigh on sentiment, ANZ Bank analyst Daniel Hynes wrote. The top oil importer's economy grew 4.7 per cent in the second quarter, official data showed earlier this week, the slowest growth since the first quarter of 2023.

A stronger U.S. dollar has also weighed on oil prices, Hynes wrote. The dollar index was slightly higher for a third consecutive session on Wednesday, making oil more expensive for investors holding other currencies.

The demand concerns and dollar strength offset signs of tightening supply in the United States, the world's largest oil producer and consumer.

U.S. crude oil inventories fell by 4.4 million barrels in the week ended July 12, market sources said on Wednesday citing data from the American Petroleum Institute.

Analysts polled by Reuters were estimating crude stocks to fall by 33,000 barrels. The U.S. Energy Information Administration will release its official storage report at 1430 GMT.

Meanwhile, rising geopolitical risk is helping limit oil price decline, Growmark Energy analysts said.

A Liberia-flagged oil tanker was assessing damage and investigating a potential oil spill after it was attacked by Yemen's Houthis in the Red Sea, the Red Sea and Gulf of Aden Joint Maritime Information Center (JMIC) said on Tuesday.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.