Oil prices inch higher but set for steep weekly losses on demand fears

Investing.com– Oil prices rose marginally in Asian trade on Friday, buoyed by some positive U.S. inventory data, but were headed for their worst week since early-September amid growing concerns over weak demand. 

Prices took little cheer from gross domestic product data showing top oil import China’s economy grew largely as expected in the third quarter, as recent stimulus measures from the country underwhelmed. 

A strong dollar also limited oil’s recovery, as strong U.S. economic data furthered bets that interest rates will fall by a slower pace in the coming months. 

Oil’s mild gains on Friday came after data showed U.S. inventories shrank in the past week, offering some positive cues on demand in the world’s biggest fuel consumer. 

Focus remained on Israel’s retaliation against Iran over a strike earlier in October. Concerns that the strike could disrupt Iranian oil supplies saw traders attach some risk premium to crude. 

Brent oil futures expiring in December rose 0.2% to 74.60 a barrel, while West Texas Intermediate crude futures rose 0.2% to $70.32 a barrel by 00:21 ET (04:21 GMT). 

Oil heads for weekly losses on demand fears 

Brent and WTI futures were set to lose around 6% this week- their worst since early-September. 

Prices were battered by heightened concerns over weak demand, especially after both the International Energy Agency and the Organization of Petroleum Exporting Countries cut their annual forecasts for demand growth. 

Both organizations cited concerns over sluggish Chinese demand, especially as recent economic readings presented little improvement in the country.

China GDP grows as expected, stimulus in focus

China’s GDP grew 4.6% year-on-year, as expected, while quarter-on-quarter growth slightly missed expectations. This brought year-to-date GDP to 4.8%, still below the government’s 5% annual target. 

The reading underscored the need for more stimulus measures from Beijing, especially as the world’s biggest oil importer grapples with persistent deflation, weak private spending and a prolonged property market crisis. 

 While the country announced a raft of stimulus measures in recent weeks, investors were still underwhelmed by a lack of clarity on the implementation, timing and scale of the planned measures.