U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are in a position to close lower for the week, but a rally on Friday is helping traders claw back some of those losses.
Crude oil has been under pressure for more than two weeks as concerns over supply were outweighed by renewed worries over demand. These worries were elevated this week because of weaker-than-expected U.S. economic data. At the start of the week, oil traders were expressing confidence in the U.S. economy, but are now worried that the slowing global economy has reached the U.S. shores.
Contributing to the early weakness was a larger-than-expected build in U.S. crude inventories according to a government report on Wednesday. This surprise news drove prices sharply lower because it followed a report from the American Petroleum Institute (API) on Tuesday that showed an unexpected drawdown. This created uncertainty for traders.
Prices were also being pressured by the news that Saudi Aramco had restored full oil production and capacity to the levels they were at before attacks on its facilities on September 14. However, perhaps slowing down the selling pressure were reports showing production declines in the United States, Russia and OPEC.
U.S. Energy Information Administration Weekly Inventories Report
On Wednesday, the EIA reported an inventory build of 3.1 million barrels for the week-ending September 27. Analysts were looking for a build of 2.4 million…