Oil declines as demand concerns return

Oil drilling rigs

Oil prices declined in early session today, Feb. 19, after the US producer price data reinforced market concerns about a slowdown in demand for fuel amid stagnant inflation and higher interest rates.

Brent crude was trading down 0.73% at $82.86 a barrel, at 09:24 am Makkah time.

West Texas Intermediate (WTI) crude futures for April delivery (the most active) fell 0.75% to $77.87, while futures for March delivery (which expires on Feb. 10) declined 0.56% to $78.75 per barrel.

Priyanka Sachdeva, Analyst at Phillip Nova, said in a research note that the decline in prices for Brent and WTI today coincides with a shift in investors’ focus to the demand side after the significant increase in the producer price index in the US, Reuters reported.

Last week, Bureau of Labor Statistics data revealed that the producer price index in the US increased by 0.3% in January, after falling by 0.1% in the revised December reading, exceeding expectations for a 0.1% increase and recording the largest pace of increase since August 2023.