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UPDATE 3-Oil prices at one-month low on demand worries

Thu, 3rd Sep 2020 04:56

* Drop in U.S. gasoline demand, weak job data weigh

* Upcoming refinery maintenance to hurt crude demand -

* Iraq denies it was seeking exemption from OPEC+ oil cuts
(Updates throughout, adds comment, changes dateline)

By Ahmad Ghaddar

LONDON, Sept 3 (Reuters) - Oil prices extended losses on
Thursday, falling to their lowest point since early August, as
worries about weaker U.S. gasoline demand and a sluggish
economic recovery from the COVID-19 pandemic dented sentiment.

Brent crude fell 79 cents, or 1.8%, to $43.64 a
barrel by 0845 GMT. U.S. West Texas Intermediate (WTI) crude
futures were down 67 cents, or 1.6%, at $40.84 a barrel.

Both benchmarks fell more than 2% on Wednesday.

U.S. gasoline demand last week fell to 8.78 million barrels
per day (bpd) from 9.16 million bpd a week earlier, Energy
Information Administration (EIA) data showed on Wednesday, with
consumption of other oil products also falling.

"It is the latest data set that possibly caught the eye of
those who ran long positions, and not even another record close
in the U.S. stock market was able to change the direction of the
herd," Tamas Varga of oil brokerage PVM said.

Other data, such as U.S. private employers hiring fewer
workers than expected for a second straight month in August,
also fed fears that economic recovery was lagging.

Oil markets, however, drew some support from Iraq's denial
it was seeking exemption from OPEC+ oil cuts during the first
quarter of next year.

OPEC's second largest producer also said it may seek to
extend by two months until the end of November the period for
making additional compensation cuts under the OPEC+ deal.

Analysts warn that the upcoming refinery maintenance and the
end of the summer driving season would also limit crude demand.

WTI crude has come under pressure "after U.S. refiners
earmarked a long list of maintenance closures over the coming
months that will no doubt impact demand for crude oil", ANZ
Research said in a note on Thursday.

Due to shutdowns ahead of Hurricane Laura, U.S. refinery
utilization rates fell by 5.3 percentage points to 76.7% of
total capacity, the EIA said.

"These factors suggest a seasonal drop-off in refinery runs
and higher oil inventory levels as we advance through
September," AxiCorp market strategist Stephen Innes said.
(Additional reporting by Shu Zhang in Singapore and Sonali Paul
in Melbourne
Editing by Mark Heinrich)

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