Oil on Friday registered its first quarterly loss in more than two years, as escalating fears over a global economic slowdown and a stronger US dollar overshadowed concerns of tightness in oil supplies.
West Texas Intermediate for November delivery ended the day down 2.14 percent, trading at US$79.49 per barrel, with prices up 2.97 percent for the week, but down 26.7 percent for the quarter. Brent crude for November delivery fell 2.34 percent to US$85.14, but remained up 0.58 percent for the week.
Crude has been roiled by the surge in the dollar to a record over the past few weeks, as aggressive central bank rate hikes darken the outlook for global growth.
Photo: AFP
The shrinking decline is a concern for OPEC, which has signaled its willingness to protect crude prices. OPEC+ is discussing plans for an output cut, which could stem the price slide and give the market more direction.
Analysts from RBC Capital Markets to JPMorgan Chase & Co have said the producer group could pull anywhere between 500,000 to 1 million barrels per day of supply.
Crude is “limping into the end of the quarter,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Management. “Next week’s OPEC+ meeting is the next big catalyst but expect trading until then to be choppy and reactive to dollar moves.”
Meanwhile, China issued new crude import and fuel export quotas as it seeks to revive its economy, which has been hard hit by COVID-19 lockdowns and a housing slump. Crude prices rallied after the quota was announced, while the giant oil product allocation for exports weighed on profits from turning crude into refined fuels. Factory activity in the Asian nation struggled for momentum last month, while services slowed, data released on Friday showed.
Widely watched time spreads in US oil futures have been ticking higher. The spread between the nearest two December futures contracts was at its strongest level in a month, indicating traders are growing steadily more bullish on the market’s outlook.
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Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day