The price of Brent crude futures increased by 33 cents to $79.85 per barrel on Friday, while West Texas Intermediate (WTI) crude futures rose by 38 cents to $76.69. Despite this uptick, both benchmarks are set for their fourth consecutive weekly decline, marking the longest losing streak since early December.
The marginal increase on Friday did little to counteract the broader downward trend driven by concerns about global fuel demand. Production activity data released on Thursday showed a slowdown across the United States, Europe, and Asia, indicating a potential drag on oil consumption due to a weaker-than-expected economic recovery.
In China, the world’s top oil importer, particularly disappointing indicators revealed a decline in manufacturing activity. This further raises current concerns about demand growth, following data that showed reduced crude imports and processing activity in June compared to the previous year.
Analysts from consulting firm FGE highlighted the ongoing concerns about China’s oil demand following the underwhelming June data. Furthermore, crude imports in Asia hit a two-year low in July, exacerbated by weak demand in China and India, according to data compiled by LSEG Oil Research.
However, FGE analysts also noted potential improvement in China’s crude oil import prospects, pointing to an increase in strategic purchases and a recovery in domestic refining rates.
Market investors are closely monitoring tensions in the Middle East. Recent events, including the targeted killings of senior leaders from Hamas and Hezbollah-linked groups in Iran, have escalated concerns about a possible full-scale conflict that could disrupt oil supply from the region.
According to FGE, these developments have significantly undermined ongoing ceasefire negotiations between Israel and Hamas, increasing the likelihood of regional conflict.
On a weekly basis, Brent futures are expected to decline by 1.7%, while WTI futures are projected to decrease by 1.1%. This downward trend represents the longest weekly decline for oil standards since the seven-week recession ending in December last year.
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