Crude futures for delivery in August were down 1.22% while Brent futures fell 1.28% this morning as demand concerns come back to the forefront.
The commodity was trading lower even as supplies fell by a record number last week. Yesterday, oil prices did gain after the EIA's report showed a larger-than-expected drawdown of 4.7 million barrels. The forecast was for a drawdown of 1.16 million barrels. However, oil could not sustain this supply rally for long as demand concerns came back into focus.
With the US, China and eurozone slowing down, demand for oil is likely to be lower, especially with no signs of any forthcoming stimulus measures by the Fed. Investors will be keeping an eye on the Chinese GDP data overnight, which is likely to show a drop to 7.5% for the second quarter on a year-on-year basis, from an 8.1% expansion in the first quarter.