Ana sayfa » Oil prices extended losses on Friday as China’s slowing economy and US dollar strengthen

Oil prices extended losses on Friday as China’s slowing economy and US dollar strengthen

A larger-than-expected decline in US crude oil inventories provided limited support to oil prices and is heading for a weekly gain


Oil prices extended losses on Friday, retreating from this week’s 10-month highs, as fears about China’s slowing economy and a strengthening U.S. dollar erased gains triggered by supply cuts by major producers Saudi Arabia and Russia.

Brent crude futures were down 41 cents, or 0.5%, at $89.51 a barrel as of 06:19 GMT, while West Texas Intermediate crude (WTI) futures were down 50 cents, or 0.6%, at $86.36 a barrel.

Both indicators hit 10-month highs earlier this week amid concerns over possible winter shortages after Saudi Arabia and Russia extended voluntary supply cuts until the end of the year.

Despite bullish signals, China’s bumpy recovery and the strong US dollar put pressure on prices.

Investors expect U.S. interest rates to remain at 20-year highs, which is freeing up the dollar and making it more expensive to buy crude oil with other currencies.

The US dollar index is near a six-month high on Friday.

Investors took profits after a recent rally sparked by concerns that supply will be tightened following prolonged production cuts in Saudi Arabia and Russia.

The market has taken the low supply news into account and clear signs of stronger global demand, particularly in China, will be needed for the rally to take off.

The common opinion of investors is that Beijing has so far failed to increase the supply level in terms of incentives.

Thursday’s data showed China’s overall exports and imports fell in August; The dual pressures of declining overseas demand and weak consumer spending are straining businesses in the world’s second-largest economy.

But China’s crude imports rose 30.9% last month as refiners built up inventories and increased crude oil processing to earn higher profits from fuel exports.

Stockpiles fell more than 6% last month, with U.S. crude oil inventories falling for a fourth consecutive week as oil refineries worked at high rates to meet global energy demand, according to data released Thursday by the Energy Information Administration (EIA).

Crude inventories fell by 6.3 million barrels, triple the 2.1 million barrel decline analysts expected.

The larger-than-expected decrease in US crude oil stocks provided limited support to oil prices.

Meanwhile, despite its commitment to continue supply cuts, Russia is expected to increase its oil exports in September, and the start of seasonal maintenance of Russian refineries appears to limit price increases.

During the week, Brent and WTI are on the path of gaining around 1%.