Oil futures edged higher on February 8 but ended the week with a loss on renewed concerns about slowing global demand and after the dollar posted its best week in six months.
The market was relatively quiet on February 8, with volume of 575,000 contracts, short of the 200-day average of 597,000 daily contracts traded.
US West Texas Intermediate crude futures strengthened 8 cents to settle at $ 52.72 a barrel but recorded a weekly slump of more than 4 percent, their steepest this year.
Brent crude futures gained 39 cents to settle at $ 62.02. On the week, Brent dipped more than 1 percent. The dollar gained 1.1 percent against a basket of currencies, its best performance since August, hurting oil, which is priced in dollars and becomes more expensive for non-US buyers when the dollar’s value rises.
The market was supported modestly on Friday by news that the United States and China may still be able to meet a March 1 deadline to resolve specific issues in their trade dispute.
The White House said on February 8 that Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin would travel to Beijing for principal-level meetings next week, easing concerns that the deadline would be missed and result in higher tariffs on goods.
“The US-China (dispute) was the overarching factor, but then it was supported by some of the poor economic data all week that we got out of Europe,” said John Kilduff, a partner at Again Capital Management in New York. “It’s showing that there’s a global economic slowdown under way.”
The European Commission on February 7 sharply cut its forecasts for euro zone economic growth due to global trade tensions and an array of domestic challenges.
Separately, US lawmakers advanced a bill known as the No Oil Producing and Exporting Cartels Act, or NOPEC, in the US House of Representatives, which stands a better chance of being signed than in years past. The bill could target OPEC producers for anti-trust behaviour.
The oil industry is opposed to the bill, but US President Donald Trump has voiced support in the past for such legislation. A senior administration official on February 8 said the United States does not “support market-distorting behaviour, including cartels.”
Libya’s National Oil Corp said on February 8 its largest oilfield, which has been out of action since December, would remain offline until security was restored.
US energy firms this week increased the number of oil rigs operating for the second time in three weeks, General Electric Co’s Baker Hughes energy services firm said in its report on February 8.