Oil prices fall; set for weekly losses on demand concerns

Investing.com– Oil prices fell Friday, on course for a third consecutive losing week as concerns over sluggish demand conditions in Asia weighed.

At 09:00 ET (13:00 GMT), Brent oil futures fell 0.9% to $81.62 a barrel, and West Texas Intermediate crude futures dropped 0.8% to $77.66 a barrel.

Crude set for third straight week of losses

Both benchmarks are on course for another losing week, the third in succession, with Brent down just under 1% and WTI nearly 3% lower.

Persistent concerns over slowing growth and demand in top importer China have been the dominant factor, part triggered by GDP data from last week, which showed the Chinese economy grew less than expected in the second quarter.

Additionally, more data this week showed the country’s apparent oil demand fell 8.1% to 13.66 million barrels per day in June.

Beijing unexpectedly cut a swathe of lending rates this week, further trying to loosen monetary policy amid growing concerns over sluggish growth. 

Apart from China, uncertainty over Japan also grew following middling inflation data from Tokyo, while weak activity data in Europe also pointed to economic woes.  

Gaza ceasefire in focus

Also weighing on the crude market have been increasing hopes of a ceasefire in Gaza.

The leaders of Australia, New Zealand and Canada called for an immediate ceasefire in a joint statement on Friday, while U.S. Vice President Kamala Harris has pressed Israeli Prime Minister Benjamin Netanyahu to help efforts at reaching a deal, striking a tougher tone than President Joe Biden.

A ceasefire has been talked about for months, but if it was to occur then some of the risk premium could be removed from the market.

Strong US GDP, rate cut hopes offer some support 

On the flip side, gross domestic product data, released on Thursday, showed that the U.S. economy grew more than expected in the second quarter, despite pressure from high rates and relatively sticky inflation.

The reading drove up hopes that the world’s biggest fuel consumer was headed for a “soft landing,” where economic growth remained steady while inflation eased. 

These hopes were also lifted by the data showing overall U.S. inflation cooled as expected in June.

According to data from the Bureau of Economic Analysis, the personal consumption expenditures (PCE) price index slipped to 2.5% in June, from 2.6% the prior month. .

Stripping out volatile items like food and fuel, the year-on-year “core” gauge, widely known as the Fed’s preferred gauge of inflation, remained at 2.6%, only marginally above the Federal Reserve’s 2% target.

This sparked increased optimism over a potential interest rate cut by the Federal Reserve in September.

Data showing steady drawdowns in U.S. oil inventories also offered some positive cues to oil markets, as fuel demand in the country remained robust amid the travel-heavy summer season. 

(Ambar Warrick contributed to this article.)

This post is originally published on INVESTING.

  • Related Posts

    Oil falls after Trump reverses Colombia sanctions threat

    By Anna Hirtenstein LONDON (Reuters) -Oil prices wavered on Monday after the U.S. and Colombia reached a deal on deportations, reducing immediate concern over oil supply disruptions but keeping traders…

    Dollar gains on tariffs fears; euro looks to ECB meeting

    Investing.com – The US dollar slipped lower Monday, rebounding after recent losses as attention returned to the potential for trade tariffs from the Trump administration at the start of a…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Capital.com Partners With LSEG to Scale Market Data Services

    • February 13, 2025
    Capital.com Partners With LSEG to Scale Market Data Services

    Pound Soars as US Tariff Threat Fades. Forecast as of 13.02.2025

    • February 13, 2025
    Pound Soars as US Tariff Threat Fades. Forecast as of 13.02.2025

    Exclusive: B2BROKER Extends cTrader Support as White Label Demand Increases

    • February 13, 2025
    Exclusive: B2BROKER Extends cTrader Support as White Label Demand Increases

    Exclusive: B2BROKER Extends cTrader Support as White Label Clients Surpasses 40

    • February 13, 2025
    Exclusive: B2BROKER Extends cTrader Support as White Label Clients Surpasses 40

    You Want to Trade at 3AM? Schwab Opens Round-the-Clock Trading Access for All Clients

    • February 13, 2025
    You Want to Trade at 3AM? Schwab Opens Round-the-Clock Trading Access for All Clients

    Webull Dares to Enter Prediction Markets Where Robinhood Failed

    • February 13, 2025
    Webull Dares to Enter Prediction Markets Where Robinhood Failed