Oil prices set for biggest weekly loss
London, May 25, 2013
Oil is poised to post its biggest weekly loss in more than a month, with Brent edging down towards $102 per barrel on Friday - pressured by ample supply and a sluggish economic recovery that could dent demand for fuel.
Crude inventories in the United States are near record levels as the world's top oil consumer produced more from shale, while shrinking factory activity in China capped fuel demand growth in the world's No.2 user.
Improved US jobs and home sales data also sparked worries that the Federal Reserve could soon scale back bond purchases and tighten liquidity in markets.
Brent eased 2 cents to $102.43 by 0904 GMT, stretching its losses into a fourth session. US crude inched down 9 cents to $94.16 a barrel.
Both were on track for a more than 2 percent drop this week - their biggest weekly drop since the week ended April 19.
"There is a lot of supply. Inventories are high in the US and I don't expect a big increase in demand from China," said Ken Hasegawa, a commodity sales manager at Newedge Japan.
"Oil still has some room to fall further. It's possible for Brent to fall to $95 within the next two months."
Brent hit a three-week low on Thursday after a survey showed that China's factory activity shrank for the first time in seven months in May, stoking worries over the demand outlook for commodities.
Investors are looking for a rebound in China's economic growth in the second half of the year that could lift the outlook for fuel demand.
"We expect China's quarter-on-quarter GDP growth to accelerate in the rest of this year, although year-on-year growth could come in flat or even fall," Bank of America Merrill Lynch economists said in a note.
The oil market is now eyeing the US driving season which starts this weekend for indications on demand.
Traders have cautioned that there is more than enough gasoline to meet seasonal demand. US gasoline stockpiles last week were close to the highest level for this time of the year since 1999, government data showed.-Reuters
More Energy, Oil & Gas Stories
- Alstom opens smart grid centre in Dubai
- Experts discuss key geosciences issues
- Egypt to permit factories to use coal for energy
- ME oil, gas transaction value up 15pc
- Victrex to showcase new product in Paris
- Aramco JV puts off giant refinery overhaul to 2015
- Libya threatens to bomb N Korean tanker
- Bahrain 'producing 850MW of surplus power'
- 2,000 experts for Bahrain geosciences summit
- Libyan rebels start oil exports, bypassing govt
- Dubai drilling company set for London IPO
- Opec output soars on higher Iraq exports
- S Korea to pay Iran $550m under nuke deal
- Qatar LPG exports will stay unchanged till 2018
- $14bn Bahrain energy sector focus for summit
- Iraq now world's fastest-growing oil exporter
- Old IT systems pose risk to oil firms
- Thomson Reuters adds commodity monitoring tool
- Oil below $90 to hit GCC economies
- GlassPoint appoints new Oman director
- Sheffield company opens Dubai hub
- Oman targets big rise in gas output
- Intertek buys UAE firm for $66m
- Qaiwan to tender Baizan refinery EPC contract
- Al Maha wins Oman Air fuel supply deal
- Iran to become top gas importer by 2025
- UAE hydrocarbon projects seen hitting $11bn
- Summit focus on occupational safety
- Aramco names new senior VP
- Siemens gets $253m Qatar power contract