After two days of gains, oil prices turned lower early on Friday, weighed down by lingering concerns about recession in major economies and a strong dollar, which makes crude more expensive for holders of other currencies.
As of 9:00 a.m. ET on Friday, WTI Crude was trading below the $90 a barrel mark, at $88.93, down by 1.73%. The international benchmark, Brent Crude, was below $95 per barrel and traded at $94.77, down by 1.88% on the day.
Both benchmarks were on track for a weekly loss of over 3.5%, as fears of a global economic slowdown trumped a large crude inventory draw and signs of strong gasoline demand in the United States.
Early in the week, oil prices dipped on Monday and Tuesday, following dismal economic data out of China, stoking fears of demand in the world's top crude oil importer.
Late on Tuesday, prices halted their slide after the American Petroleum Institute (API) reported a draw in crude inventories in the United States. A day later, the EIA reported a major draw in oil inventories of 7.1 million barrels for the week to August 12, sending oil prices higher. In gasoline, the EIA estimated an inventory draw of 4.6 million barrels for last week, which compared with a 5-million-barrel decline for the previous week.
The bullish EIA report supported oil prices through Wednesday and Thursday, but on Friday, the strong U.S. dollar and the fears of recession took the upper hand and crude prices fell.
Despite the constructive EIA report this week, "sentiment remains largely negative, with lingering demand concerns and a potential Iranian nuclear deal casting a shadow over the market," Warren Patterson, Head of Commodities Strategy at ING, said on Thursday.
Crude oil "remains on track for a weekly loss with talks of an Iran nuclear deal and global demand concerns being partly offset by signs of robust demand for fuel products," Saxo Bank said on Friday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More