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U.S. Crude on Track for 3% Weekly Drop on Demand Worries

Published 07/05/2019, 07:55 AM
Updated 07/05/2019, 08:18 AM
© Reuters.
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Investing.com - Crude oil prices were mixed on Friday but were on track for sharp weekly losses as concerns over demand outweighed the extension of the OPEC-led production cut agreement and ongoing tension in the Middle East.

New York-traded West Texas Intermediate crude futures fell 43 cents, or 0.8%, to $56.91 a barrel by 7:51 AM ET (11:51 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., rose 29 cents, or 0.5%, to $63.59.

WTI was down 3.2% this week, while Brent has fallen 4.4% in the last seven days.

While waiting for the publication of the U.S. employment report, markets were digesting further signs of economic weakness elsewhere.

German factory orders slid 2.2% in May, bringing their annualized decline to 8.6%, the largest since 2009 and a sign of how manufacturers in the euro zone’s biggest economy are suffering from the U.S.'s trade disputes with China and others.

The data were an echo of a worse-than-expected drop in U.S. manufacturing figures released on Wednesday ahead of the Fourth of July holiday.

A much smaller-than-expected decline in U.S. crude inventories, also released on Wednesday, added to worries that demand may be fading even in the peak U.S. summer driving season.

Those fears haven't been banished by the unanimous decision on Tuesday by OPEC and non-OPEC members including Russia to extend by nine months their agreement to cut production by 1.2 million barrels per day. The decision had been priced in ahead of time by markets.

A Reuters survey released Friday found that OPEC oil output sank to a new five-year low in June as a rise in Saudi supply did not offset lost output from Iran and Venezuela caused by U.S. sanctions and from other outages elsewhere in the group.

In other energy trading, gasoline futures slid 1.2% to $1.8945 a gallon by 7:53 AM ET (11:53 GMT), while heating oil fell 0.7% to $1.8853 a gallon.

Lastly, natural gas futures gained 1.2% to $2.317 per million British thermal unit.

-- Reuters contributed to this report

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