Investing.com – Yo-yo days are back in oil, with the market falling as much in a day as it rose previously, as global growth fears offset bullish energy fundamentals.
After Thursday’s higher close of 2.8%, spurred by a surprise inventory drawdown at the delivery hub for U.S. crude, oil prices settled down almost that much on Friday as signs of slowing growth in China dampened hopes for demand.
China’s worse-than-expected retail sales saw their weakest growth in 15 years, while industrial output in the Asian giant rose the least amount in nearly three years, casting further doubt over demand from the world’s second-largest economy. The result was risk aversion across financial markets that put Wall Street’s on track to a second weekly loss.
“Trade war and recession fears are becoming part of our daily market swings,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago said.
U.S. crude settled down $1.38, or 2.6%, at $51.20 per barrel. It was down by a similar percentage on the week.
U.K. , the global benchmark for crude, fell by $1.40, or 2.1%, to $60.05 by 2:48 PM ET (19:48 GMT)
Even a third-straight weekly drop in the U.S. oil rig count didn’t provide much help to oil.
U.S. drillers cut four rigs this week, adding to last week’s drop of 10 rigs, which were the most in more than two years, oil services firm Baker Hughes said in its closely-watched weekly data. Shale firms cut back on drilling activity after oil prices fell by a third over the past two months. Still, that didn’t stop the United States from briefly turning into a net oil exporter for the first time in history earlier this month.
Contrary to market expectations, oil prices have barely recovered since the Saudi-dominated OPEC, and its allies led by Russia, pledged last week to reduce a total of 1.2 million barrels per day from global supplies over the next six months, defying U.S. President Donald Trump, who had demanded that producers keep their crude flowing at the lowest prices possible.
With just about two weeks to the end of 2018, WTI remains down about 15% on the year and some 32% lower from four-year highs of nearly $77 per barrel hit in early October. Brent is down about 10% on the year and nearly 32% lower from four-year highs of nearly $87 per barrel hit two months ago.
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Source: Investing.com
