Yasin Ebrahim
Investing.com – Crude oil prices eased from five-month highs to settled lower on Tuesday, as fears about weaker oil demand resurfaced as the curtain closes on the summer driving season ahead of weekly U.S. inventory slated for Wednesday.
In the New York Mercantile Exchange WTI crude futures settled 33 cents lower to settle at $41.61 a barrel, while on London's Intercontinental Exchange (NYSE:ICE), Brent fell 37 cents to trade at $44.64 a barrel.
The end of the summer driving season, which traditionally sees a pickup in crude demand as Americans take to the road, will likely weigh on gas demand and prices to the downside at a time when there are more people expected to work from home.
"As summer begins to fade, demand recovery may be limited, and there's a possibility we may see more downside potential in the last quarter of the year," Patrick De Haan, head of petroleum analysis for GasBuddy. "Traditionally, gasoline demand weakens into the autumn, and we may see a drop in gas prices as we progress through fall."
The move lower comes in the wake of bullish remarks earlier this week on the outlook for oil demand from Saudi Arabia's Aramco (SE:2222).
Aramco chief executive Amin Nasser said on Sunday that global oil demand would continue its recovery as lockdown measures ease. China's gasoline and diesel demand are "almost at pre-COVID 19 levels," Nasser added. "As countries ease the lockdown, we expect the demand to increase."
Investors will look to weekly crude data for further insight into oil demand, with economists forecasting another draw in crude inventories.
The American Petroleum Institute weekly inventory reports its weekly take on petroleum inventories later on Tuesday, while the U.S. Energy (NASDAQ:USEG) Information Administration issues its supply totals Thursday at 10:30 a.m. ET.
The EIA report is expected to show a draw of about 2.9 million barrels for the week ended Aug. 7.