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Oil Posts Weekly Loss as Global Energy Demand Outlook Darkens


These translations are done via Google Translate
Oil fell this week as prospects for a global economic slowdown weighed heavily on the demand outlook.West Texas Intermediate futures dropped 6.7% for the week amid tightening monetary policy and renewed anti-virus lockdowns in China. Meanwhile, traders shrugged off an announcement by G-7 leaders of plans to cap the price of Russian crude in retaliation for Vladimir Putin’s aggression in Ukraine.

The G-7 move is largely symbolic “as the Russians are proving capable of circumventing restrictions already imposed by the G-7 countries, and hitting a record high export volume in August despite sanctions,” analysts at wholesale-fuel distributor TACenergy wrote in a note to clients.

On Friday, prices briefly rebounded after the US State Department said the Iran’s latest response to nuclear-deal proposals was “not constructive.” The talks are being closely watched by oil traders because any deal to relax sanctions could allow more Iranian crude to flow into markets.

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Prices sent lower by demand concerns, stronger US dollar

Oil fell by more than 20% in the three months through August, erasing all of the gains since Russia’s late-February invasion of Ukraine.

The price retreat poses a challenge for the Organization of Petroleum Exporting Countries and its allies, with ministers due to meet Monday to plan output policy. While OPEC-watchers expect the group to keep supplies steady, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman raised the possibility of a production cut in remarks last week.

Prices:
  • WTI for October delivery rose 26 cents to settle at $86.87 a barrel
  • Brent for November settlement rose 66 cents to $93.02

Widely-watched time spreads, an indicator of market tightness, have been volatile. Brent’s prompt spread — the difference between its nearest two contracts — was $1.21 a barrel in a backwardation, compared with almost $2 a barrel at the end of last week and 63 cents two weeks ago.



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