Last Updated: June 10, 2023, 01:47 IST
New York, United States of America (USA)
Some analysts expect oil prices to rise if the U.S. Federal Reserve pauses hiking interest rates at its next meeting over June 13-14. (Image: REUTERS)
Brent crude futures fell $1.17, or 1.5%, to settle at $74.79 a barrel, while the U.S. West Texas Intermediate crude fell $1.12, or 1.6%, to $70.17 a barrel
Oil prices fell more than a dollar a barrel on Friday to record a second straight weekly decline, as disappointing Chinese data added to doubts about demand growth after Saudi Arabia’s weekend decision to cut output.
Brent crude futures fell $1.17, or 1.5%, to settle at $74.79 a barrel, while the U.S. West Texas Intermediate crude fell $1.12, or 1.6%, to $70.17 a barrel.
Both benchmarks lost more than $3 on Thursday after a media report that a U.S.-Iran nuclear deal was imminent and would result in more supply. Prices pared losses after both countries denied the report, ending about a dollar a barrel lower.
“Thursday’s price moves show how fragile oil is,” said UBS analyst Giovanni Staunovo.
“The Saudi cut lifted prices slightly, and then the chatter of the potential return of Iranian barrels saw a large drop. Long investors are likely on the sidelines until larger oil inventory declines become visible,” he said.
Oil prices had risen early in the week, buoyed by Saudi Arabia’s pledge over the weekend to cut more output on top of the cuts agreed earlier with the Organization of the Petroleum Exporting Countries and its allies.
However, a rise in U.S. fuel stocks and weak Chinese export data have weighed on the markets.
“As we move deeper into the summer driving season in the Northern Hemisphere, demand will be a key factor in determining whether limited inventories must drive prices higher, or soft demand leads to lower prices,” said Rob Haworth, senior investment strategist at U.S. Bank Asset Management.
China’s factory gate prices fell at the fastest pace in seven years in May and quicker than forecasts, as faltering demand weighed on a slowing manufacturing sector and cast a cloud over the fragile economic recovery.
Some analysts expect oil prices to rise if the U.S. Federal Reserve pauses hiking interest rates at its next meeting over June 13-14. The Fed’s decision may also influence Saudi Arabia’s next move, analysts said.
“The important thing is that despite those changes (Saudi, US-Iran) to output, oil remains below $80, no doubt much to the disappointment of the Saudis,” said OANDA analyst Craig Erlam.
“What comes next may well depend on the inflation data and interest rate decisions over the coming weeks,” he said.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Reuters)
