Oil posts weekly loss as recession fears muddle outlook

Oil posted a weekly decline as volatile trading and recession fears overshadowed a fundamentally tight supply picture.

West Texas Intermediate crude futures rose to settle over US$104 a barrel on Friday, but it wasn’t enough to stave off a weekly decline of 3.4 per cent. Investors remain concerned that restrictive US monetary policy could herald a recession. Still, physical signals remain robust, especially in the US, where the prompt timespread, which closely reflects the supply and demand balances at the country’s biggest storage hub in Cushing, Oklahoma, surged to the highest level since March earlier in the week. 

“We believe it is premature for commodities to succumb to recession concerns when the global economy is still growing and markets remain in deficit on strong demand,” said Goldman Sachs Group Inc. analysts, including Jeffrey Currie, in a note to clients.