New Delhi

Oil is headed for a fourth consecutive weekly slide, as concerns over demand from the world's biggest economies are outweighing increased geopolitical tensions. Brent traded near $80 a barrel after a 1.6 per cent drop in yesterday's session, with West Texas Intermediate below $77. Factory gauges in the US and China both showed a contraction on Thursday, indicating signs of weakness in manufacturing.

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Although prices did surge briefly on Wednesday, after the killing of Hamas and Hezbollah leaders that raised tension in West Asia, the pressure on oil prices has not abated. There are still concerns about demand from China, the world's biggest oil importer, over its economic challenges. Bolstering the downward pressure was Thursday's reiteration by OPEC+ in a monitoring meeting of its plan to boost production in the next quarter.

It is the longest streak of weekly declines since December, with futures still modestly higher for the year. Some support has come from expectations that US monetary easing would perk up consumption, with Federal Reserve Chair Jerome Powell hinting an interest rate cut could happen as soon as September.

Other market metrics also suggest a less tight market. While still in a bullish backwardated structure, the gap between Brent's two nearest contracts has also narrowed. The spread was last trading at 60 cents a barrel in backwardation versus more than a dollar two weeks ago.

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In summary, demand concerns in key economies and anticipated supply increases from OPEC+ weigh heavily on oil prices. With surging geopolitical tensions adding to the market's volatility, the outlook remains murky for oil, underscoring the tricky balance between supply, demand, and external drivers impacting the energy market.