Oil prices near multi-week lows on demand worries

Oil prices rose on Thursday but stayed near multi-week lows hit overnight after U.S. gasoline demand fell and economic recovery from the COVID-19 crisis lagged.

U.S. West Texas Intermediate crude futures rose 0.22%, or 9 cents, at $41.60 per barrel. Brent crude climbed 0.05%, or 2 cents, at $44.45 per barrel. 

Both benchmarks fell over 2% on Wednesday, with WTI dropping to its lowest close in almost four weeks and Brent at its weakest level since Aug. 21.

U.S. gasoline demand fell to 8.78 million bpd from 9.16 million bpd week-on-week. Lower employment data for a second straight month in August also raised worries about a lagging economic recovery.

U.S. refinery utilization rates dropped by 5.3% to 76.7% of total capacity due to refinery shutdowns ahead of Hurricane Laura. 

Analysts predict Brent to average $46 in the fourth quarter before climbing to $55 by the end of 2021. 

Still, oil markets drew support from Iraq’s denial to seek exemption from OPEC+ output cuts. OPEC and its allies are currently slashing output by 7.7 million bpd until December to support prices.