$USO U.S. crude posts 7th straight weekly loss
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Posted On: 08/19/2018 4:29:59 PM
$USO
U.S. crude posts 7th straight weekly loss on worries of weakening demand
U.S. WTI crude oil settled modestly higher, +0.7% at $65.91/bbl, but plunged 2.5% on the week for a seventh consecutive weekly decline, marking its longest losing streak in three years; Brent crude finished +0.6% at $71.83/bbl, capping a 1.3% weekly decline, its third in a row.
Traders say the main drags this week were worries over the global economic outlook due to trade tensions between the U.S., weakening emerging market currencies and a large and surprising build in U.S. crude inventories.
Jefferies cites a "lack of demand" for crude oil and refined products from emerging markets, Singapore's DBS bank says Chinese data showed a "steady decline" in activity and "the economy is facing added headwinds due to rising trade tensions," and Japan's MUFG Bank believes the weakening Turkish lira will constrain further growth in gasoline and diesel demand this year.
Despite the bearish factors, analysts say prices were prevented from falling further because of U.S. sanctions against Iran; "Iranian crude exports were still near 2M bbl/day in July and will likely begin to fall dramatically in August with financial sanctions taking effect. With oil export sanctions now three months out, we expect exports to fall by more than 500K bbl/day by the end of 3Q," Jefferies says.
U.S. crude posts 7th straight weekly loss on worries of weakening demand
U.S. WTI crude oil settled modestly higher, +0.7% at $65.91/bbl, but plunged 2.5% on the week for a seventh consecutive weekly decline, marking its longest losing streak in three years; Brent crude finished +0.6% at $71.83/bbl, capping a 1.3% weekly decline, its third in a row.
Traders say the main drags this week were worries over the global economic outlook due to trade tensions between the U.S., weakening emerging market currencies and a large and surprising build in U.S. crude inventories.
Jefferies cites a "lack of demand" for crude oil and refined products from emerging markets, Singapore's DBS bank says Chinese data showed a "steady decline" in activity and "the economy is facing added headwinds due to rising trade tensions," and Japan's MUFG Bank believes the weakening Turkish lira will constrain further growth in gasoline and diesel demand this year.
Despite the bearish factors, analysts say prices were prevented from falling further because of U.S. sanctions against Iran; "Iranian crude exports were still near 2M bbl/day in July and will likely begin to fall dramatically in August with financial sanctions taking effect. With oil export sanctions now three months out, we expect exports to fall by more than 500K bbl/day by the end of 3Q," Jefferies says.
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