Oil Futures Pare Early Gains, Settle Notably Lower

Crude oil futures settled lower on Thursday as worries about the outlook for energy demand due to slowing global economic growth weighed on prices.

Oil prices rose sharply earlier in the session, continuing to benefit from Wednesday’s data from the Energy Information Administration (EIA) showing a drop in U.S. crude inventories last week.

Russia’s decision to cut gas supplies via Nord Stream 1, its main gas link to Europe, to just 20% of capacity, contributed as well to the uptick in oil prices earlier in the day.

However, worries about the outlook for energy demand due to a drop in U.S. GDP and reports saying OPEC+ may consider a small increase in output weighed on oil prices as the session progressed.

West Texas Intermediate Crude oil futures for September ended lower by $0.84 or about 0.9% at $96.42 a barrel, falling from a high of $99.84 a barrel touched earlier in the day.

Brent crude futures dropped to $101.36 a barrel but recovered subsequently and were hovering around $102.10 a little while ago, gaining $0.43 or about 0.43%.

Data from U.S. Energy Information Administration (EIA) on Wednesday showed crude stockpiles in the U.S. dropped 4.52 million barrels last week, about three times the expected decline.

Gasoline inventories in the U.S. tumbled 3.3 million barrels last week after climbing a combined 9.32 million for the weeks ended July 15th and July 8th. The EIA data also showed that distillate stockpiles fell by 784,000 barrels last week, as against an expected drop of about 500,000 barrels.

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