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Oil remains near multi-month lows on demand concerns

FILE PHOTO – An oilfield worker works on a pump jack at PetroChina’s Daqing oilfield in northeast China’s Heilongjiang province November 5, 2007. REUTERS/Stringer (CHINA)

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LONDON, Aug 8 (Reuters) – Oil prices rose slightly from multi-month lows on Monday as lingering concerns about weakening demand due to a subdued economic outlook outweighed some positive economic data in from China and the United States.

Erasing earlier gains, Brent crude futures were down 51 cents, or 0.5%, at $94.41 a barrel at 0816 GMT. U.S. West Texas Intermediate crude was at $88.58 a barrel, down 43 cents, or 0.5%.

Last week, first-month Brent prices hit their lowest level since February, falling 13.7% and posting their biggest weekly decline since April 2020, while WTI lost 9.7%, worries regarding a recession hitting oil demand weighing on prices.

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“Last week’s price action left no doubt that recession-related demand concerns outweigh supply fears. One might even go so far as to say that the war bounty has evaporated,” said PVM analyst Stephen Brennock.

Both contracts clawed back some losses on Friday after job growth in the United States, the world’s biggest consumer of oil, accelerated unexpectedly in July.

On Sunday, China also surprised markets with faster-than-expected export growth. Read more

China, the world’s largest crude importer, imported 8.79 million barrels per day (bpd) of crude in July, down from a four-year low in June, but still 9.5% lower than a year earlier , according to customs data.

In Europe, Russian exports of crude oil and petroleum products continued to pour in ahead of an impending embargo by the European Union which will take effect on December 5.

Last week the Bank of England warned of a prolonged recession in Britain. Read more

Gasoline demand in the United States continues to weaken despite lower prices at the pump, and inventories are increasing.

In terms of U.S. production, energy companies cut oil rig counts last week the most since September in the first decline in 10 weeks.

The U.S. clean energy sector got a boost after the Senate passed a $430 billion bill on Sunday. Read more

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Additional reporting by Florence Tan Editing by Mark Potter

Our standards: The Thomson Reuters Trust Principles.

Shadia Nasralla

Thomson Reuters

Writes about the intersection of corporate oil and climate policy. Has reported on politics, economics, migration, nuclear diplomacy and affairs from Cairo, Vienna and elsewhere.

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