Oil heading for sharpest weekly decline since March

Last week, oil prices reached their highest level in 2023.
On Wednesday, representatives of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) met. There, the member states decided to maintain their current supply policy. | Photo: Angus Mordant
On Wednesday, representatives of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) met. There, the member states decided to maintain their current supply policy. | Photo: Angus Mordant
by MARKETWIRE

Oil prices fall Friday morning, heading for the biggest weekly drop since March while increased selling in the US bond market sparked concerns about a global economic slowdown and a sharp drop in demand for fuel, Reuters news agency reports.

A barrel of the European reference oil, Brent, costs USD 84.22 on Friday morning, compared to USD 85.37 on Thursday afternoon. At the same time, US WTI oil is trading at USD 82.55 per barrel compared to USD 83.83.

Last week, oil prices reached the highest level in 2023, but this week Brent has fallen by around 11.6%, and WTI has fallen by around 9%, Reuters reports.

”Oil prices are stabilizing after a brutal week in which a relentless sell-off in the bond market sparked global concerns about economic growth,” says Edward Moya, analyst at Oanda, according to Reuters. 

Moya adds that the worst week for oil prices since March is starting to attract buyers, given that the oil market is still weighed down by tight supply in the short term.

According to a note from JPMorgan, the investment bank expects demand growth in the final quarter of the year to remain healthy but slow down. At the same time, National Australia Bank points out that the recent dip in oil prices is only temporary.

”We believe that as the market starts to become aware of the declining oil inventories, the price of a barrel of Brent is likely to move back above USD 90,” the Commonwealth Bank of Australia writes in a note according to Reuters.

On Wednesday, representatives of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) met. There, the member states decided to maintain their current supply policy.

Data this week shows a large drop in US demand for fuel. On Friday, the market awaits the US jobs report for signs of the strength of the US economy.

(Translated by DeepL with additional editing by Christian Radich Hoffman)

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