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Brent crude settled down $1.24, or 1.5%, at $81.13 a barrel.
West Texas Intermediate crude ended $1.12, or 1.4%, lower at
$77.16 a barrel.
For the week, Brent was trading down more than 1% while WTI fell
beyond 3%.
"Yesterday’s better-than-expected U.S. GDP growth figures
initially supported the crude market," said George Khoury,
global head of education and research at CFI. "However, these
gains were overshadowed by concerns about declining Chinese oil
demand."
Data released last week showing that China's total fuel oil
imports dropped 11% in the first half of 2024 have raised
concern about the wider demand outlook in China.
"The Chinese demand situation is going down the tubes here and
crude oil prices are going down with it," said Bob Yawger,
director of energy futures at Mizuho in New York.
China's economy is threatening to enter a deflationary cycle,
where prices will fall because of falling demand, Yawger said.
"And that is about the worst possible scenario for a country
that is the largest importer of crude oil on the planet," he
said.
Meanwhile, demand from the world's top oil consumer was also
expected to ease as U.S. refiners are preparing to cut back
production as the end of the summer driving season in early
September nears.
The nation's second largest refiner, Valero Energy, said on
Thursday its 14 refineries would run at 92% of combined capacity
in the third quarter. Valero's refineries ran at 94% in the
second quarter.
In the Middle East, hopes of a ceasefire in Gaza have been
gaining momentum.
A ceasefire has been the subject of negotiations for months, but
U.S. officials believe the parties are closer than ever to an
agreement for a six-week ceasefire in exchange for the release
by Hamas of female, sick, elderly and wounded hostages.
Baker Hughes' count of U.S. oil drilling rigs, an early
indicator of future output, increased by five to 482 this week
and by three in July, raising the number of rigs for the first
month since March.
(Reporting by Erwin Seba; Additional reporting by Laila Kearney
in New York; Editing by Marguerita Choy and Emelia
Sithole-Matarise)
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