U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Friday, threatening to erase this week’s gains just one day after the markets hit a four-month high. The price action is being driven by uncertainty over domestic and global economic growth on future demand. Despite the worries, the market continues to be supported by the OPEC-led supply cuts and the U.S. sanctions against Iran and Venezuela.
On Thursday, both WTI and Brent crude oil hit new highs for the year, but both showed little follow-through to the upside when they took out the previous day’s high. In fact, both closed lower which indicated the selling may be greater than the buying at current price levels. The price action also suggested investors aren’t willing to buy strength at current levels.
Renewed Concerns Over Demand
Worries about demand jumped to the forefront this week, driven by the dovish policy shift by the U.S. Federal Reserve on Wednesday and Friday morning’s weaker-than-expected economic news in Europe, which could weigh on future demand.
The U.S. Federal Reserve announced on Wednesday that it was keeping its benchmark interest rate unchanged, while indicating it would not raise rates in 2019. The…