Oil prices slumped on Friday, with Brent crude falling 1.57% in afternoon trading as the oil demand outlook out of China continues to weigh on market sentiment.
Oil prices are set to finish out a loss for the week, a weak starting point for OPEC as they prepare for their Joint Ministerial Monitoring Committee meeting scheduled for August 1.
China's refinery utilization has sagged this month, down 3.5% from this same time last year, and its crude oil imports have also been done 325,000 year over year through June. This disappointing crude oil demand from China has triggered a rash of calls for an oil supply surplus for the end of this year and next, weighing on today's prices.
OPEC officials have suggested that the upcoming meeting will be routine, and that it doesn't plan on many any changes to production cut quotas. While some analysts and traders have suggested that the group could make changes, OPEC has committed to being careful about adding barrels back into the market.
Nevertheless, the falling prices could put pressure on OPEC's heavyweights, Saudi Arabia and Russia, to push for a pullback on any future plans to rollback the cuts.
At 12:44 pm ET, the WTI crude oil benchmark was trading at $77.09 per barrel, off $1.19 (-1.52%) on the day. Brent crude was trading at $81.08 per barrel, down $1.29 (-1.57%) on the day.
The falling prices come even as U.S. crude oil inventories have drawn down considerably over the last four weeks-nearly 20 million barrels total, according to API estimates. This inventory drawdown comes even as the United States produced 13.3 million barrels of oil per day on average over the last few weeks-a return to the highest level in history.
The chances of a possible Israel/Hamas peace deal have also weighed on crude oil prices.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More