There are “lingering concerns” over weak demand from US and European oil refineries.
That’s according to the Organisation of Petroleum Exporting Countries (OPEC) which added a global excess of crude and refined products would delay a long anticipated rebalancing of the market.
OPEC’s monthy report for August added refineries in these regions “could slash runs, decreasing crude demand in response to a declining gasoline crack” in those countries in a period “when summer driving and margins should have been at their highest during the year”.
That has been the main reason for the downward pressure on crude prices in recent weeks.
It added: “Refining margins have been weakening during the last month due to high product inventories, which were caused by the lower-than-expected increase in demand.”
Oil prices fell to a 12-year low in January and averaged $42.68/bbl (32.4/bbl) in July.
Saudi Arabia pumped a record 10.67 million barrels per day (bpd) of crude last month.
OPEC expects demand for its crude in 2017 to average 33.01 million bpd, suggesting a supply surplus of 100,000bpd if OPEC keeps output steady.