Oil on track for weekly loss on demand concerns

Singapore — Oil prices looked set to post their second straight weekly loss as prices continued to fall on Friday over demand concerns and scepticism that the US and Iran could strike a nuclear deal.

Brent crude futures dropped 35c, or 0.5%, to $75.61 a barrel by 3.04am GMT, while the US West Texas Intermediate crude futures eased 35c, or 0.5%, to $70.94.

“Oil prices are expected to stay in a range of about $3 above and below $70 for WTI in the near term,” Satoru Yoshida, a commodity analyst with Rakuten Securities.

Both benchmarks slid by about $1 on Thursday, rebounding from their earlier losses of more than $3, after the US and Iran both denied a report by the Middle East Eye that they were close to a nuclear deal.

For the week, they were on track for losses of about 1% losses, after shedding about the same amount in the previous week.

Oil prices had risen early in the week after Saudi Arabia’s pledge over the weekend for deep output cuts, but they pared gains after rising US fuel stocks and weak Chinese export data.

Yoshida said factors such as fears over tighter supply and higher demand as the US enters driving season, which could drive prices higher, were being offset by worries over a slow pickup in China’s fuel demand.

“Crude prices didn’t get any favours from China as their economic recovery has disappointed,” Oanda analyst Edward Moya said.

While a Reuters poll of economists showed the US Federal Reserve could skip a rate hike at its June 13-14 meeting, the absence of similar signals from other major central banks was weighing on the oil demand outlook, Moya added. 

Reuters