Oil prices were flat on Thursday, cooling from the previous session as weak demand in the United States and broad oversupply risks countered concern over attacks in the Middle East and Russia’s war in Ukraine.
Brent crude futures were up 1 cent, or 0.01 per cent, at $67.50 a barrel by 0156 GMT, and U.S. West Texas Intermediate crude futures added 2 cents, or 0.03 per cent, to $63.69.
The benchmark contracts gained more than $1 each on Wednesday following Israel’s attack on Hamas leadership in Qatar the day before, and as Poland scrambled its own and NATO air defences to shoot down suspected Russian drones that had strayed into its airspace during an attack on western Ukraine.
It was the first time a member of the Western military alliance is known to have fired shots during Russia’s war in Ukraine.
Israel’s airstrike in Qatar took place shortly after Hamas claimed responsibility for a shooting on Monday that killed six people at a bus stop on the outskirts of Jerusalem.
But neither the Middle East attacks nor the downing of the drones in Poland held any immediate risk of disruption to oil supplies, and attention turned to supply-and-demand balances, with rising oil stocks, falling producer prices and a slowing labour market pointing to a softening U.S. economy.
U.S. crude inventories rose by 3.9 million barrels in the week to September 5, the Energy Information Administration said, against expectations of a draw of 1 million barrels. Gasoline stocks also rose, adding 1.5 million barrels, against expectations of a draw of 200,000 barrels.
Analysts are now expecting the U.S. Federal Reserve to cut interest rates next week at its mid-September policy meeting.
“Easing labour market conditions mean the FOMC is set to vote for a 25bp cut next week … although a rare triple dissent in favour of a 50bp move could steal the headlines,” Stephen Brown, deputy chief economist for North America at Capital Economics, said in a note.
The European Central Bank, meanwhile, is set to leave its interest rates unchanged on Thursday. (Reporting by Katya Golubkova; Editing by Tom Hogue)
