HOUSTON, Oct 5 (Reuters) - Oil prices fell about 2% on Thursday, extending the previous session's losses of nearly 6%, as worries about fuel demand outweighed an OPEC+ decision to maintain oil output cuts, keeping supply tight.
Global benchmark Brent crude futures and U.S. West Texas Intermediate crude futures have declined about $10 a barrel in less than 10 days after edging close to $100 in late September.
The combined percentage drop over the last two days was the steepest since May for both crude benchmarks.
Government data on Wednesday also showed a sharp decline in U.S. gasoline demand. Finished motor gasoline supplied, a proxy for demand, fell last week to its lowest since the start of this year.
"I don't see gasoline demand getting much above 8.5 million barrels a day until the holiday shopping season kicks in and that's going to be a problem for the market," said John Kilduff, partner at Again Capital LLC in New York.
As conflict escalated between Israel and Hamas, Brent crude and West Texas Intermediate prices rose over 5% in early trade on Monday.
Crude prices surged ten trading sessions ago but dropped significantly last week due to concerns about rising bond yields and the U.S. Federal Reserve's stance on interest rates, Hari said. "But after the first knee-jerk reaction, crude has pulled back a little bit, and if the situation remains limited to Israel and Palestine, there won't be an impact on oil."
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