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Friday morning trading in Asia saw oil prices in the green with a slight rise of less than a percentage point, and not enough to keep crude from its third consecutive week of closing at a loss as the U.S. economy drags markets down and demand from China remains elusive.
Friday morning Brent crude prices at 4:31 a.m. GMT were up 0.88%, for a gain of 64 cents, at $73.14 per barrel. West Texas Intermediate (WTI) was up 0.86%, for a gain of 59 cents, at $69.15 per barrel.
The first four days of the week saw Brent on a major losing streak of 8.5%, while WTI lost over 10% for the week.
Brent went from $87.33 on April 12, to $73 on May 4 as U.S. economic data continued to come in, spreading fears of a weakening economy. Also weighing on oil prices was the Fed’s Wednesday meeting in which it raised interest rates another 25 basis points, but also indicated a pause in rate hikes should inflation continue to ease. There are continuing concerns that rate hikes are slowing economic growth and negatively impacting oil prices, while U.S. bank failures add to the unease.
China’s recovery, which will be a significant determining factor for oil prices, remains uncertain after April declines in manufacturing activity, after three months of increase.
Oil markets will now be looking at next week’s U.S. crude oil inventory data, which many analysts anticipate will report the third drawdown in a row, potentially boosting oil prices or helping to staunch the losses.
For the first time this year, crude oil inventories last week fell below the five-year average, a development that failed to lend support to oil prices, with Standard Chartered suggesting that the traditional inverse relationship between inventories and oil prices has been disrupted.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com
Concerns about China’s economy are nonsense. They are just concerted efforts by Western media to apportion some blame on China for the plunging oil prices when the full blame should be solely pinned on a lax US banking system.
How could there be economic concerns about a China projected to grow this year at 5.2%-6.5% according to the IMF, the highest growth rate in the world with the prospect of even exceeding these rates? How could there be any worries about oil demand from a country that broke oil import records in March this year when its imports hit 12.3 million barrels a day (mbd)?
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert