By Jacquelyn Melinek
Oil posted a weekly loss amid concerns over a slowing global economy and abundant crude supplies.
Futures in New York fell 1.7% this week. China reported the slowest pace of economic growth since the early 1990s last quarter, and U.S. government data a day earlier showed American crude inventories expanding.
“The oil market continue to be incredibly focused on demand and we continue to see indications of ‘luke warm’ oil at best,” said Leo Mariani, energy analyst at Keybanc Capital Markets in Dallas. “We’ve seen a lot of business investment freeze up and that has impacted oil investments.”
U.S. crude inventories rose by 9.3 million barrels in the week through Oct. 11, according to data from the Energy Information Administration, surpassing analyst estimates of a 3 million-barrel increase.
“The reality is that crude markets are still struggling with prospect of substantial surplus in next year, which is expected but is very much in line with what growth data is highlighting,” said Daniel Ghali, commodity strategist at TD Bank in Toronto. “There’s starting to be a worry out there on how much OPEC can do to offset it.”
WTI for November delivery fell 15 cents to settle at $53.78 a barrel on the New York Mercantile Exchange.
Brent crude for December settlement lost 49 cents to end the session at $59.42 a barrel on the London-based ICE Futures Europe. The global benchmark fell 1.8% this week and was at a premium of $5.55 to WTI for the same month.
China’s gross domestic product trailed estimates and added to a deteriorating global demand outlook for crude. With a drop-off in exports to the U.S. expected to continue due to the trade war, the Chinese economy is likely to keep struggling as deflationary pressures hit company profits.
“The demand outlook is a question mark since the overnight data out of China wasn’t great,” John Kilduff, partner at hedge fund Again Capital LLC in New York, said in a telephone interview. “The slowness in GDP didn’t help things and the market is still battling that.”
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