Oil prices fell on Thursday, after rising sharply in the first half of the week, as traders weighed a larger-than-expected build in U.S. oil stocks against tightening global supply.
Brent futures were down 45 cents, or 0.4%, at $108.33 a barrel, while U.S. West Texas Intermediate futures were off 69 cents, or 0.7%, at $103.56 a barrel at 0354 GMT. Both contracts on Wednesday had shrugged off a large build in U.S. crude inventories to end the trading session roughly 4% higher.
“Demand growth is starting to moderate and the picture for the latter half of the year is looking increasingly bleak,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
However, the oil complex is heavily focused on the short term and fears of supply shortages are crowding out that view, she said. The International Energy Agency on Wednesday warned that from May onwards roughly 3 million barrels per day of Russian oil could be shut-in due to sanctions or voluntary embargoes.
The probability of a EU ban on Russian oil being agreed may be almost zero, but no one will be able or wanting to say that clearly, Hari said.
