Oil fell as trade tensions between the U.S. and China worsened the outlook for global demand growth.
Futures dropped 2% in New York, erasing all gains for the week. Prices had touched a one-month high on Thursday after American inventories slid by 4.77 million barrels, more than twice what analysts had expected. Yet despite the prospect of easing trade tensions as the U.S. and China plan face-to-face negotiations next month, Commerzbank AG and UBS Group AG said on Friday that their expectations for prices had weakened because of the economic gloom.
Crude has been volatile in recent weeks as the tit-for-tat tariff war between the world’s top two economies worsened, fueling concerns oil demand may be dented further. Commerzbank cut its Brent crude forecasts by $5 a barrel, predicting that the grade will average $60 through to the end of next year, while UBS said the “deteriorating” outlook would pressure the benchmark down to $55.
West Texas Intermediate oil for October delivery fell $1.14 to $55.16 a barrel on the New York Mercantile Exchange as of 7:17 a.m. local time. Brent for November declined $1.30 to $59.65 a barrel on the ICE Futures Europe Exchange. The global benchmark crude traded at a $4.62 premium to WTI for the same month.
Source : Bloomberg