Oil holds steady near multi-week lows on demand worries

MELBOURNE, Sept 3 (Reuters) - Oil prices were little changed
in early trade on Thursday, sitting near multi-week lows hit
overnight on worries about fuel demand due to a patchy U.S.
economic recovery.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
inched up 3 cents, or 0.1%, to $41.54 a barrel at 0115 GMT,
while Brent crude LCOc1 futures slipped 7 cents, or 0.2%, to
$44.36 a barrel.
Both benchmark contracts fell more than 2% on Wednesday,
with WTI sliding to its lowest close in nearly four weeks and
Brent at its lowest since Aug. 21, after a U.S. Federal Reserve
survey showed the economic recovery was mixed. At the same time, data showed jobs growth was slower than
expected in August, while factory orders in July were higher
than expected. In further signs of a limited recovery, U.S. gasoline demand
dropped in the week to Aug. 28 to 8.78 million barrels per day
from 9.16 million bpd a week earlier, the Energy Information
Administration said. "All in all, we think there is enough spare oil capacity and
enough pressure on demand growth to justify only a gradual
increase in oil prices over the next 12 months," Commonwealth
Bank (CBA) commodities analyst Vivek Dhar said in a note.
U.S. refinery run rates fell to 76.5% of total capacity last
week. While that was due to shutdowns ahead of Hurricane Laura,
analysts said the upcoming refinery maintenance and the end of
summer driving season would limit crude demand.
"These factors suggest a seasonal drop off in refinery runs
and higher oil inventory levels as we advance through
September," said AxiCorp market strategist Stephen Innes.
CBA forecasts Brent will average $46 a barrel in the fourth
quarter before rising to $55 by the end of 2021.
"We see downside risks to our outlook linked to the
uncontrolled spread of COVID-19," Dhar said in the note.