Oil price news: Oil falls for third straight week as demand fears trump war risk
BNN Bloomberg
Oil rose along with equities on Friday, but still declined for a third straight week on growing concerns over global demand and the unwinding of the Israel-Hamas war’s risk premium.
West Texas Intermediate climbed steadily through most of Friday’s session to settle above US$77 a barrel, up 1.9 per cent. Broader financial markets bounced back from U.S. Federal Reserve Chair Jerome Powell’s comments that officials won’t hesitate to tighten policy more. Traders also passed over a soft reading on U.S. consumer sentiment showing that long-term inflation expectations reached a 12-year high. Still, concerns about waning demand and higher supply are driving a longer-term retreat in crude prices.
“The futures market appears oversold,” Royal Bank of Canada analysts including Michael Tran wrote in a note. “While there may be some short-term, asymmetric upside for crude prices, mounting concerns of slowing demand could be enough to ease the enthusiasm for a significant relief rally over the coming weeks.”
WTI has plunged around 13 per cent in the past three weeks — including a 4.2 per cent drop this week — on bearish consumption signals from China, the U.S. and Europe. Meanwhile, flows from the Middle East remain unaffected by the Israel-Hamas war despite mounting concerns of a potential two-front conflict as Hezbollah, a Lebanon-based Islamist group, intensifies its offensive.