Oil suffers deep weekly loss as concerns over demand intensify
BNN Bloomberg
Oil headed for the biggest weekly decline since early April on increasing evidence that a global economic slowdown is destroying demand, with prices near the lowest level in six months.
West Texas Intermediate were little changed below US$89 a barrel on Friday, and was 10 per cent lower for the week. US gasoline consumption has softened while crude stockpiles have increased. Supply from Libya has picked up, helping shrink key oil futures time-spreads and ease the tightness in the market.
The pullback has been broad-based. Gasoline futures are also down 10 per cent this week, a potential sign of further relief at the pump. Physical oil differentials have narrowed and Brent’s prompt spread -- that gap between the nearest two contracts that gauges the health of supply -- was US$1.79 a barrel in backwardation, down from more than US$6 a week ago.
