- WTI crude oil is trading in negative territory during Wednesday’s early European session, down 0.35% on the day.
- Slower economic growth in the US and China may reduce demand for WTI.
- The potential shutdown of Libya's oil production and ongoing geopolitical tensions in the Middle East could limit the decline in crude oil prices.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $75.10 on Wednesday. The WTI price is edging lower as investors express concerns about slower economic growth in the United States and China.
On Wednesday, the Conference Board reported that the US Consumer Confidence Index improved to 103.3 in August, up from a revised 101.9 in July. However, worries about the labor market persist, with the Unemployment Rate hitting a nearly three-year high of 4.3% last month.
Additionally, concerns about China's economic health and future oil demand are weighing on crude oil prices. As the world’s largest oil importer, China’s demand is critical, and Daan Struyven, head of oil research at Goldman, pointed out that demand has softened as the country transitions from gasoline-powered vehicles to electric cars.
US crude inventories fell last week, with the American Petroleum Institute (API) reporting a decline of 3.4 million barrels for the week ending August 23, compared to an increase of 0.347 million barrels the previous week. The market had anticipated a decrease of 3.0 million barrels.
Despite the bearish sentiment, the downside for WTI prices might be limited due to potential disruptions in Libya's oil production and ongoing geopolitical tensions in the Middle East. Libya, which produces about 1.2 million barrels per day and exports over 1 million bpd, has seen output concerns drive prices higher.
