Crude posted the longest stretch of weekly declines since 2015 as international trade tensions threatened energy demand in the face of flourishing oil production by the world’s biggest suppliers.
Futures advanced 1.2 percent in New York on Friday, paring a sixth straight weekly loss.
The US and China are threatening to erect tariff walls against almost half a trillion US dollars in goods collectively, raising fears about weakening economic growth.
Photo: Reuters
“The trade war — I don’t know where it’s going to end,” Tyche Capital Advisors LLC commodity fund manager Tariq Zahir said. “That definitely can have an impact, at least on demand.”
Meanwhile, concerns about scarce oil supplies have receded as supplies expanded in Saudi Arabia, Russia, the US and even Libya, the International Energy Agency (IEA) said.
Despite the IEA’s assurances about ample worldwide crude supplies, the Paris-based group said that the calm might prove fleeting, echoing its warning from last month that ongoing losses in Venezuela and US sanctions against Iran could eventually cut more supply than others can replace.
West Texas Intermediate (WTI) crude for September delivery rose US$0.82 to settle at $67.63 a barrel on the New York Mercantile Exchange. Prices posted a 1.3 percent drop this week. Total volume traded was about 24 percent below the 100-day average.
Oil climbed on Friday as Turkey entered a full-blown financial meltdown, which is “a little scary for oil. A lot of vital assets go through Turkey and there is some geopolitical risk premium that got raised as a result,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC.
Brent for October settlement rose US$0.74 to end the session at US$72.81 on the London-based ICE Futures Europe exchange. The contract is down 0.5 percent for the week.
The global benchmark crude traded at a US$5.87 premium to WTI for the same month.
Money managers cut bullish ICE Brent crude oil bets by 18,441 net-long positions to 353,905, weekly ICE Futures Europe data on futures and options showed.
Long-only positions fell to the lowest in more than a year.
Oil market news:
‧ Gasoline futures on Friday added 2 percent to settle at US$2.0392 a gallon.
‧ The US oil rig count rose by 10 this week to the highest since March 2015, according to data from Baker Hughes Inc.
‧ The US administration forecast that it will persuade countries to cut Iranian oil imports by as much as 1 million barrels a day when it reimposes energy sanctions in early November, according to two people familiar with the efforts to choke off Tehran’s crude sales.
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