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Brent crude futures were down $1.07, or 1.32%, to $79.97 per
barrel by 0945 GMT, while U.S. West Texas Intermediate crude
futures fell $1.27, or 1.62%, to $76.89.
"The oil market is struggling to retain its recently recaptured
$80/bbl floor as the recent string of weak macroeconomic
indicators reassert their downward pressure while geopolitical
concerns appear to fade into the background," said Harry
Tchilinguirian, head of research at Onyx Capital Group.
"The shape of the Brent futures curve is also changing this
morning in favor of less backwardation, as the market reassesses
the relative availability of crude in view of disappointing
crude import and refinery runs figures out of China."
Backwardation occurs when spot prices are higher than future
prices, giving energy firms little incentive to pay to store
fuel.
In China, refineries sharply lowered crude processing rates last
month on tepid fuel demand.
The Organization of the Petroleum Exporting Countries (OPEC) on
Monday trimmed its demand outlook for this year, citing softer
expectations for China.
The real breakout from rangebound, and potentially firmer, Brent
crude prices will likely come when the U.S. Federal Reserve
makes a call on whether to cut interest rates or not at its
September meeting, independent oil analyst Gaurav Sharma said.
Also keeping a lid on prices was Libya's Waha Oil Company
resuming flows to Es Sider port after finishing maintenance work
on a pipeline.
Providing a floor to prices was U.S. retail sales data on
Thursday which beat analysts' expectations, while separate data
showed fewer Americans had filed new applications for
unemployment benefits last week, sparking renewed optimism
around U.S. economic growth.
"Receding U.S. recession concerns have come to the aid of crude
bulls this week, with better-than-expected retail sales and
jobless claims figures allaying fears of a more rapid than
expected deterioration in U.S. economic conditions," said
Michael Brown, senior research strategist at Pepperstone.
As for lingering geopolitical risks, a fresh round of
negotiations began on Thursday to secure a ceasefire in the Gaza
war, even as Israeli troops continued their assault on the
Palestinian enclave.
The talks, which have been boycotted by Hamas, were extended and
will resume in the Qatari capital Doha on Friday.
Attention is also focused on whether Iran will retaliate over
Israel's killing of Hamas political leader Ismail Haniyeh in
Tehran late last month.
"Expectations remain that a response will happen given that Iran
needs to save face amongst neighbor states," said Panmure
Liberum analyst Ashley Kelty.
(Reporting by Arunima Kumar in Bengaluru, Shariq Khan in New
York and Sudarshan Varadhan in Singapore; editing by Elaine
Hardcastle and Jason Neely)
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