Oil prices fell on Thursday, driven by concerns over weakening Chinese demand and expectations of a ceasefire in the Gaza conflict. Brent crude futures for September dropped 1.1% to $80.80 a barrel, while U.S. West Texas Intermediate crude slid 1.1% to $76.74.
The decline comes despite positive U.S. economic data showing a faster-than-expected GDP growth in the second quarter and easing inflation. However, these factors were overshadowed by the weak Chinese demand outlook. China’s oil imports and refinery runs have trended lower this year, indicating a sluggish economic recovery and weaker fuel demand.
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Meanwhile, efforts towards a ceasefire agreement between Israel and Hamas in Gaza are gaining traction. A potential resolution could ease concerns about oil supply disruptions, leading to further price declines.
Analysts say the market is struggling to maintain momentum due to these factors, with oil prices finding it increasingly difficult to hold onto rallies. The Canadian wildfires in the oil sands region are also a factor, but their impact on oil production and prices remains unclear.