Crude oil futures prices closed down on Thursday because the International Energy Agency (IEA) further lowered its forecast for global crude oil demand in 2020, and the news that two Arab countries made diplomatic progress alleviated supply risks in the Middle East. But at the same time, US crude oil inventories have fallen for the third consecutive week, coupled with recent signs of rising consumption, helping to limit the decline in oil prices.

The price of West Texas Light Crude Oil (WTI) futures for September delivery on the New York Mercantile Exchange fell 43 cents to close at $42.24 per barrel, a decrease of 1%. At the same time, the price of North Sea Brent crude oil futures for October delivery on London’s ICE European Futures Exchange also fell 47 cents to close at $44.96 per barrel, a decrease of 1%.

In its monthly oil market report released on Thursday, the International Energy Agency has deepened its forecast of shrinking global demand in 2020. The agency expects global demand to decrease by 8.1 million barrels per day year-on-year to 91.9 million barrels per day. The day before the International Energy Agency released this report, OPEC said that it expects this year’s crude oil demand growth to fall by 9.1 million barrels per day to 90.6 million barrels per day.

But analysts said that this report by the International Energy Agency may only have a short-term impact, while the report released by the U.S. Energy Information Administration (EIA) on Wednesday showed that U.S. crude oil inventories continued to fall, supporting oil prices. EIA reported that crude oil inventories fell by 4.5 million barrels last week, marking the third consecutive week of decline.

Phil Flynn, a senior market analyst at Price Futures Group, said this data highlights signs of improving domestic demand in the United States and the possibility of a tightening of global supply. He pointed out that the IEA report stated that global demand exceeded supply in June, which means that global inventories will be reduced for the rest of this year. Flynn said in a daily report: “Therefore, unless the second wave of (new crown pneumonia) shutdown or a major stock market crash causes any major setbacks, the prospect of a year-end increase in oil prices looks very likely.”

However, the International Energy Agency also stated in the report: “The uncertainty in demand caused by the new crown pneumonia and the possibility of increased production means that the rebalancing of the oil market is still subtle.” Global economist at the Economist Intelligence Unit Cailin Birch (Cailin Birch) said: “The initial rebound in crude oil consumption occurred in June, and the rebound in July was less severe, and it may stabilize in August”, because before the advent of the vaccine, travel and aviation Fuel demand is unlikely to continue to recover, most likely by the end of 2021.

At the same time, the news that the UAE and Israel reached a comprehensive diplomatic relationship “eliminated some of the geopolitical risks in oil,” Oanda senior market analyst Edward Moya said in a latest market report.

In other energy transactions on the New York Mercantile Exchange, the price of RBOB gasoline futures for September delivery fell 0.7% to close at $1.2348 per gallon; the price of heating oil futures for September delivery fell 1.5% to close at 1.2381 per gallon. US dollars; natural gas futures prices for delivery in September rose 1.4% to close at US$2.182 per million British thermal units.

The US Energy Information Administration released its natural gas inventory report for the week ending August 7 earlier on Thursday. The report showed that US natural gas inventories increased by 58 billion cubic feet (about 1.6 billion cubic meters) this week, an increase that exceeded expectations. According to a survey by Standard & Poor’s Global Platts, analysts on average expect US natural gas inventories to increase by 51 billion cubic feet (about 1.4 billion cubic meters) this week.