🤑 It doesn’t get more affordable. Grab this 60% OFF Black Friday offer before it disappears…CLAIM SALE

Oil Records Biggest Weekly Drop Since July on Demand Pessimism

Published 10/04/2019, 04:14 PM
Updated 10/04/2019, 04:36 PM
Oil Records Biggest Weekly Drop Since July on Demand Pessimism
C
-
ICE
-
LCO
-

(Bloomberg) -- Oil registered its biggest weekly decline since July as a streak of disappointing economic data compounded fears about a global recession.

The 0.7% rise in New York-traded futures on Friday wasn’t enough to correct a 5.5% drop for the week. Rising U.S. payrolls and the lowest unemployment rate in five decades undercut prospects of interest-rate cuts by the Federal Reserve.

“The relative strength of the jobs report throws cold water on concept that the Fed will cut rates,” said Bob Yawger, director of the futures division at Mizuho Securities USA.

Oil has been under pressure all week from a series of gloomy U.S. economic data. A key measure of American service-industry activity dropped to the lowest in three years, while an employment gauge registered its weakest reading in more than five years.

West Texas Intermediate for November delivery rose 36 cents to settle at $52.81 a barrel on the New York Mercantile Exchange.

Brent for December delivery increased 66 cents to settle at $58.37 on the ICE (NYSE:ICE) Futures Europe Exchange. It traded at a $5.63 premium to WTI for the same month.

Signs of economic deterioration in the U.S., China and Germany are worsening an already fragile consumption outlook for fuels. OPEC member Nigeria warned Thursday that oil demand will be “very challenging” next year. Those concerns, combined with quick repairs at damaged Saudi Arabian oil installations, have evaporated oil’s gains following the Sept. 14 bombardment of the kingdom.

“Oil markets are focusing on severe macro risks, but are also shrugging off the most heightened geopolitical risk in years,” Ed Morse, an analyst at Citigroup Inc (NYSE:C)., wrote in a report. “As markets shed just about any consideration of supply risk, attention stays focused on what is nearly universally expected to be a significantly weaker year of demand growth.”

Washington and Beijing are set to restart high-level trade negotiations next week, but the chances of a short-term breakthrough don’t appear to be high. Meanwhile, the U.S. imposed tariffs on European goods including aircraft and dairy products this week.

Drilling rigs targeting crude in U.S. fields fell by three to 710 last week, the lowest since May 2017, Baker Hughes reported Friday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.