Oil records lowest close in 4 weeks; Brent below $84

Oil drilling rigs

Oil prices fell today, Aug. 23, as US stockpiles declined for the second week in a row amid data indicating a slowdown in global economic activity this month.

The Energy Information Administration data showed that US oil inventories fell by 6.1 million barrels in week ended Aug. 18, compared with analysts' expectations for a 2.8 million-barrel drop.

The US crude oil inventories amounted to 433.5 million barrels, which is 2% below the five-year average.

S&P Global survey indicated that economic activity continued to slow during the month of August, as the composite purchasing managers’ index in the Eurozone fell to its lowest level since November 2020, and in the US it declined to its lowest level since February.

“Investors are reluctant to take big positions ahead of the Jackson Hole symposium as they want to find clues for the next step by the US Federal Reserve,” said Hiroyuki Kikukawa, an Analyst at Nissan Securities.

Kikukawa added that it is expected that the impact of concerns about rising interest rates and slowing demand in China will outweigh the production cuts by OPEC+ in the short term, Reuters reported.

Brent crude futures for October delivery fell 0.95%, or 82 cents, to close at $83.21 a barrel – the lowest settlement in four weeks.

WTI crude for October delivery also fell 0.95%, or 75 cents, to $78.89 a barrel – the lowest settlement since July 26.