Oil drops on weak sentiment, set for weekly decline
2024.07.18 21:54
By Shariq Khan
NEW YORK (Reuters) – Oil prices fell on Friday, setting up for a second weekly decline, as mixed economic signals weighed on investor sentiment and boosted the dollar.
prices fell by 51 cents, or 0.6%, to $84.50 a barrel by 0035 GMT. U.S. West Texas Intermediate crude futures fell 72 cents, or 0.9%, to $82.10 a barrel.
The climbed for the second consecutive session after stronger-than-expected data on the U.S. labour market and manufacturing earlier in the week. A stronger greenback dampens demand for dollar-denominated oil from investors holding other currencies.
Meanwhile, a lack of concrete stimulus measures from top oil importer China’s third plenum has also weighed on commodities, ANZ analyst Daniel Hynes said.
China’s economy grew at a slower-than-expected 4.7% pace in the second quarter, official data showed, sparking concerns about the country’s oil demand.
Elsewhere on the economic front, Japan’s core inflation perked up in June, leaving the door open for an interest rate hike in the major oil market.
” was under pressure amid a broader risk-off tone across markets,” Hynes said.
On a weekly basis, Brent crude was set to decline about 0.5% while WTI was down about 0.1%.
Oil prices found some support in the prior two sessions after the U.S. government reported a bigger-than-expected weekly decline in oil stockpiles.
However, analysts at consultancy firm FGE said broader inventory trends look more bearish than expected this month. They noted that crude stocks have drawn at a slower than usual pace for this time of the year and global fuel stocks rose last week.
Meanwhile the OPEC+ producer group is unlikely to recommend changing the group’s output policy, including a plan to start unwinding one layer of oil output cuts from October, three sources told Reuters on Thursday.
