Oil prices fall from 2-month highs; still on track for weekly gains By Investing.com

Investing.com–Oil prices fell from two-month highs on Thursday, as traders collected some profits from a strong run-up this week, while soft U.S. economic data raised some concerns over long-term demand.

At 05:00 ET (09:00 GMT),  fell 0.3% to $87.05 a barrel, while fell 0.3% to $82.76 a barrel. 

This weakness followed some weak labor market and purchasing managers index indicators, which signaled some cooling in the U.S. economy, the world’s biggest energy consumer.

PMI data from top importer China also underwhelmed on Wednesday. 

US inventories see massive drawdown; summer demand picks up

That said, both benchmarks are still on track for a fourth straight weekly increase, helped by a substantially bigger-than-expected drawdown in U.S. inventories.

Official , released on Wednesday, showed that U.S. oil stockpiles fell just over 12 million barrels (mb) in the week to June 28, much more than expectations for a draw of 0.4 mb.

Outsized draws in and stockpiles also showed that demand was picking up with the summer season. 

A record number of Americans are forecast to travel by road this week, on account of the Independence Day holiday on Thursday. 

Optimism over increased demand in the world’s biggest fuel consumer, especially during the travel-heavy summer season, had been a key point of support for oil prices in recent weeks. 

Middle East tensions, supply risks persist 

Persistent concerns over geopolitical disruptions in the Middle East also kept a risk premium in play, especially as tensions between Israel and Lebanon’s Hezbollah showed little signs of deescalating. 

Potential disruptions in production in the Gulf of Mexico also factored into oil prices, as Hurricane Beryl made landfall in Jamaica and was set to make its way up along the east coast.

“Recent reports suggest that the hurricane is now disrupting US oil output, with companies like Shell (LON:), BP (NYSE:), and Exxon Mobil (NYSE:) evacuating some of their platforms in the Gulf of Mexico,” said analysts at ING, in a note.

“According to the data from the National Hurricane Center and the Bureau of Ocean Energy Management, around 73k b/d of federal offshore oil production is believed to be within the projected path of the storm.”