Oil posted a weekly loss amid concerns over a slowing global economy and abundant crude supplies.
Futures in New York fell 1.7 percent this week. China reported the slowest pace of economic growth since the early 1990s for last quarter, while US government data a day earlier showed US crude inventories expanding.
“The oil market continue to be incredibly focused on demand and we continue to see indications of ‘lukewarm’ oil at best,” said Leo Mariani, energy analyst at Keybanc Capital Markets Inc in Dallas. “We’ve seen a lot of business investment freeze up and that has impacted oil investments.”
US crude inventories rose by 9.3 million barrels in the week through Oct. 11, according to data from the US Energy Information Administration, surpassing analyst estimates of a 3 million barrel increase.
“The reality is that crude markets are still struggling with prospect of substantial surplus in next year, which is expected, but is very much in line with what growth data is highlighting,” said Daniel Ghali, commodity strategist at TD Bank in Toronto.
“There’s starting to be a worry out there on how much OPEC can do to offset it,” Ghali said.
West Texas Intermediate (WTI) for November delivery fell US$0.15 to settle at US$53.78 a barrel on the New York Mercantile Exchange, down 1.7 percent for the week.
Brent crude for December settlement lost US$0.49 to end the session at US$59.42 a barrel on the London-based ICE Futures Europe. The global benchmark fell 1.8 percent this week and was at a premium of US$5.55 to WTI for the same month.
The US benchmark oil price has been stuck below US$55 a barrel since the start of the month.
China’s GDP trailed estimates and added to a deteriorating global demand outlook for crude.
With a drop-off in exports to the US expected to continue due to the trade spat, the Chinese economy is likely to keep struggling as deflationary pressures hit company profits.
“The demand outlook is a question mark since the overnight data out of China wasn’t great,” John Kilduff, partner at hedge fund Again Capital LLC in New York, said in a telephone interview. “The slowness in GDP didn’t help things and the market is still battling that.”
“The perception of falling demand is driving prices lower,” said Bob Iaccino, market strategist at Chicago-based Path Trading Partners. “No one thinks that demand is going to get higher.”
Short-selling of WTI crude this week rose to 114,709 futures and options, up from 106,578 the week prior and just 39,948 in the one that ended on Sept. 17, according to US Commodity Futures Trading Commission data.
Long bets edged lower by 0.1 percent, to 201,239 contracts. Money managers’ net-long position, or the difference between the two, shrank 8.8 percent.
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