Oil down during week ending July 19 amid strong US dollar, weak Chinese data

ANKARA

Oil prices declined by 0.2% during the week ending July 19 over strong US dollar and weak Chinese economic data, while positive demand outlook in US pushed prices up.

The International benchmark Brent crude traded at $84.89 per barrel at 2.41 p.m. local time (1141 GMT) on Friday, down by around 0.16% relative to the closing price of $85.03 a barrel on Friday last week.

West Texas Intermediate (WTI), the American benchmark, traded at $80.88 a barrel at the same time on Friday, a decline of about 0.17% from last Friday's session, which closed at $81.02 per barrel.

The rise of the US dollar against other currencies aided the fall in oil prices this week. Strong dollar ramped up prices for non-US currency holders and discouraged investors.

The US dollar index increased by 0.24% to 104.035, compared to the closing price of $103.783 on Friday last week.

Political uncertainty in the US supported a higher US dollar. Former US President Donald Trump was targeted in an assassination attempt during a rally in Pennsylvania on July 13, just days before he was set to accept the Republican nomination for a third term.

Efforts to implement a cease-fire in the Middle East, home to the vast majority of global oil reserves, continued to influence prices this week.

During the past months, the US, Qatar, and Egypt have been mediating efforts to reach an agreement between Israel and Hamas that would ensure a hostage exchange and a cease-fire.

Also, weak economic data in China led to worry over a slowdown in economy in the world's largest crude oil importer.

The gross domestic product (GDP) of China rose by 4.7% in the second quarter of 2024, below market expectations, according to official figures. Data came after figures last week showed a softness in oil imports.

Meanwhile, the fall in US commercial crude oil reserves, which reflect market perceptions of strengthening domestic demand, limited downward price movements.

In the US, the world's largest oil consuming country, commercial crude oil inventories decreased by 4.9 million barrels last week, according to data released by the Energy Information Administration on Wednesday.

The drop in inventory was well above market prediction of around 900,000 barrels.

Also, rate cut signal from the US Federal Reserve (Fed) also gave upward support to oil prices. The Fed is getting closer to an interest rate cut as inflation is slowing, Fed Governor Christopher Waller said Wednesday.

Expectation that the Fed will start reducing policy interest rates soon also supports that economic activity in the country will increase.

The US Federal Reserve is expected to cut interest rates in December, following an anticipated reduction in September.