Home Energy Oil Prices Decline for 6th Straight Week

Oil Prices Decline for 6th Straight Week


New York-traded crude oil futures edged higher on Friday, but prices still posted their third consecutive weekly decline amid concerns over the weakening U.S. economic outlook and the impact on future oil demand prospects.  On the New York Mercantile Exchange, light sweet crude futures for delivery in December rose 0.76% on Friday to settle the week at USD97.85 a barrel by close of trade.  The December contract settled 0.26% higher at USD97.11 a barrel on Thursday, clawing back from a session low of USD95.95, the weakest level since July 1. 

Oil futures were likely to find support at USD95.95 a barrel, the low from October 24 and resistance at USD100.29 a barrel, the high from October 22.  Despite Friday’s modest gains, Nymex oil futures still lost 3.22% on the week, the sixth weekly decline in the past seven weeks.  U.S. crude prices have been on a downward trend in recent weeks amid concerns the recent U.S. government shutdown created a drag on economic growth and eroded demand in the world’s largest oil consumer. 

Weekly U.S. supply data released earlier in the week showed that crude oil inventories rose by 5.2 million barrels to hit 379.8 million barrels last week, the highest level since June 28.  On Friday, data showed that core durable goods orders declined for the third consecutive month in September, while another report showed that U.S. consumer sentiment fell to the lowest level in almost a year this month. 

The disappointing data points came after a government report released earlier in the week showed that U.S. jobs growth had slowed in September, even before the start of the 16-day government shutdown.  The downbeat data bolstered expectations that the Federal Reserve would postpone plans to start scaling back its asset purchase program until at least the beginning of next year. 

In the week ahead, investors will be focused on the outcome of Wednesday’s Fed policy setting meeting. The central bank is expected to keep its USD85 billion-a-month asset purchase program on track.  U.S. data releases will also be in focus in the week ahead, with reports on retail sales, inflation figures, pending home sales and private-sector jobs growth all on tap.  Oil traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases. 

The U.S. is the world’s largest oil consuming nation. 

Read more: https://www.nasdaq.com/article/crude-oil-futures-weekly-outlook-oct-28-nov-1-cm292291#ixzz2iyrWGg1a