Crude posted the longest stretch of weekly declines since 2015 as international trade tensions threatened energy demand in the face of flourishing oil production by the world’s biggest suppliers.
Futures advanced 1.2 percent in New York on Friday, paring a sixth straight weekly loss. The U.S. and China are threatening to erect tariff walls against almost half a trillion dollars in goods collectively, raising fears about weakening economic growth.
“The trade war — I don’t know where it’s going to end,” said Tariq Zahir, a commodity fund manager at Tyche Capital Advisors LLC. “That definitely can have an impact, at least on demand.”
Meanwhile, concerns about scarce oil supplies have receded as supplies expanded in Saudi Arabia, Russia, the U.S. and even Libya, the International Energy Agency said. Despite the IEA’s assurances about ample worldwide crude supplies, the Paris-based group warned that the calm may prove fleeting, echoing its warning from last month that ongoing losses in Venezuela and U.S. sanctions against Iran could eventually cut more supply than others can replace.
West Texas Intermediate crude for September delivery rose 82 cents to settle at $67.63 a barrel on the New York Mercantile Exchange. Prices posted a 1.3 percent drop this week. Total volume traded was about 24 percent below the 100-day average.
Oil climbed Friday as Turkey entered a full-blown financial meltdown, which is “a little scary for oil. A lot of vital assets go through Turkey and there is some geopolitical risk premium that got raised as a result,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC.
Brent for October settlement rose 74 cents to end the session at $72.81 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.87 premium to WTI for the same month.
Money managers cut bullish ICE Brent crude oil bets by 18,441 net-long positions to 353,905, weekly ICE Futures Europe data on futures and options showed. Long-only positions fell to the lowest in more than a year.
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