US crude posts 7th straight weekly loss, on weaker demand outlook
Crude prices edged higher on Friday, but posted yet another weekly decline on worries that oversupply would weigh on the U.S. market and that trade disputes and slowing global economic growth would slow demand for oil.
U.S. crude was on track for its seventh consecutive weekly decline and global benchmark Brent was set to drop for a third week.
“One of the biggest concerns out there is that China’s demand numbers are coming down if China’s GDP growth is slowing,” said Tariq Zahir, managing member at Tyche Capital in New York.
U.S. West Texas Intermediate (WTI) crude futures ended Friday’s session 45 cents higher at $65.91 a barrel, after touching a session high of $66.39 earlier. For the week, U.S. crude was down 2.5 percent, marking its longest losing streak in three years.
Brent crude oil futures were up 52 cents at $71.95 a barrel by 2:25 p.m. ET, after rising over $1 to hit a high of $72.49 a barrel. Brent was heading for a more than 1 percent weekly loss.
Traders said the main drags on prices were the darkening economic outlook due to trade tensions between the United States and China, and weakening currencies in emerging economies that are weighing on growth and fuel consumption.
Friday’s pull back from session highs came on mounting worries that U.S. crude inventories would post another consecutive gain, said Bob Yawger, director of futures at Mizuho Americas.
U.S. government data this week showed a large build up in crude inventories, with production also increasing.
“Investors remain cautious as Wednesday’s surprise gain in U.S. stockpiles remained fresh in their minds,” ANZ bank said on Friday.
The number of U.S. oil drilling rigs, an indicator of future production, were unchanged in the week at 869 rigs, according to a weekly report from energy company Baker Hughes on Friday. Last week, drillers added 10 oil rigs, the biggest rise since May.
Another major drag on prices was the darkening economic outlook on the back of trade tensions between the United States and China, and weakening emerging market currencies that are weighing on growth and fuel consumption, traders and analysts said.
U.S. investment bank Jefferies said there was a “lack of demand” for crude oil and refined products from emerging markets, while Singapore’s DBS bank said that Chinese data showed a “steady decline” in activity and that “the economy is facing added headwinds due to rising trade tensions”.
