Oil prices drop below US$85/bbl on demand worries

The news: Crude oil prices have extended their slide overnight as worries about demand outweigh the decision by OPEC-plus to maintain production cuts.

The numbers: Benchmark Brent crude oil futures ended Thursday USD1.74, or 2.03% lower at USD84.07 ($132) a barrel, while US West Texas Intermediate crude (WTI) fell USD1.91, or 2.3%, to USD82.31. This comes on top of a nearly 6% drop on Wednesday, and prices have now fallen by USD10 in less than 10 days.

The context: Investors are worried that peak demand for fuel consumption is behind, after data this week showed weekly US gas consumption fell to its lowest level in 22 years amid torrential rains in the US Northeast and a 30% spike in fuel prices that depressed demand. The US dollar is also hovering near 11-month highs, making crude more expensive for global buyers. The fall in prices comes despite Saudi Arabia this week saying it would maintain a voluntary cut of 1 million barrels per day (bpd) until the end of 2023, while Russia would keep a 300,000 bpd voluntary export curb as well.