U.S. oil futures fell to new lows for the week

U.S. oil prices end lower for the week as demand fears outweigh Middle East war jitters

U.S. oil futures fell to new lows for the week as Chinese data showed declining imports and refinery input demand suggested that a further slowdown in the Chinese economy will weigh on total global demand, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Data from China reportedly showed refinery runs fell 6.1% year over year in July.

That followed a negative International Energy Agency report on Thursday, which mentioned a likely surplus emerging in the physical market in the quarters ahead, and a “lackluster” weekly Energy Information Administration report Wednesday, which showed a surprise build in headline crude stockpiles, Richey noted.

Gains early on this week were geopolitically driven amid heightened tensions between Israel and Iran, said Richey.

Looking ahead, Richey said that “geopolitical tensions remain an influence on the market … with a mild fear bid remaining in place.” However, “recession fears have emerged to be a more important factor for the market as we approach the end of the summer driving season, and any rallies driven by headlines out of the Middle East are likely to be capped in the low $80s.”

A soft economic landing is “continuing to be priced in with oil at current levels but if a hard landing becomes more likely in the weeks or months ahead,” expect oil prices to fall, Richey said – with WTI moving toward the low to mid-$60s “not only possible, but likely.”