U.S. West Texas Intermediate crude oil futures are trading higher on Friday, however, the market is still in a position to close lower for the week. The market opened on its high this week, but sellers came in quickly to stop the move, producing a potentially bearish closing price reversal top in the process.
The selling was primarily driven by two factors: worries over a global economic slowdown and renewed concerns over U.S.-China relations. Underpinning the market were the OPEC-led supply cuts and political turmoil in Venezuela, which could lead to a supply disruption.
The theme throughout the week was the weakening global economy which translates into lower demand for crude oil. Supporting this idea were remarks from a couple of central banks this week to go along with previous central bank concerns about an economic slowdown.
The U.S. Federal Reserve is already on record saying it would be willing to take a pause in rate hikes if the economy continues to sputter. On Wednesday, the Bank of Japan kept its ultra-loose monetary policy unchanged. It also cut its inflation forecasts and warned of growing risks to the economy from trade protectionism and slowing global demand. On Thursday, the European Central Bank left interest rates unchanged…