Crude oil prices were headed for almost a 6% loss for week ending Oct. 4 as weak macroeconomic data in the U.S., Europe and China intensified worries that global oil demand could fall for the remainder of 2019.
Despite a strong recovery on Friday, crude prices were headed for a second week of major losses having decreased around 5% last week as a result of Saudi Arabia's quick output recovery after the drone attacks.
International benchmark Brent crude was trading at $58.49 per barrel at 1245 GMT, heading for a 5.52% weekly loss, after it closed the previous week at $61.91 a barrel.
American benchmark West Texas Intermediate was at $52.98 a barrel at the same time for a 5.24% decline after ending last week at $55.91 per barrel.
Investors are concerned that the U.S. trade war with China, and now against Europe as well, could have a significant negative impact on major economies and their oil demand.
The World Trade Organization's (WTO) ruling on Wednesday allowed the U.S. to impose $7.5 billion worth of tariffs on the European Union, which Washington could begin implementing as soon as Oct. 18.
Yet, due to more than a year-long trade dispute with China, the American economy has already begun showing signs of a slowdown.
Manufacturing Purchasing Managers Index (PMI) in the U.S. came in at 47.8 in September, the lowest level since June 2009, according to the Institute for Supply Management (ISM) on Tuesday.
Non-manufacturing PMI also dropped to 52.6 in September, from 56.4 in August, according to the ISM on Thursday; while factory orders fell 0.1% in August, despite posting an increase of 1.4% in July, the U.S. Commerce Department said.
In China, manufacturing PMI came in at 49.8, according to the country's National Bureau of Statistics on Monday, showing a contraction for the fifth consecutive month.
Germany’s manufacturing PMI also sank to 41.7 in September, down from 43.5 in August, according to IHS Markit data on Tuesday, and recorded its lowest reading since 2009.
The WTO cut its annual global trade growth estimates on Tuesday to 1.2% for 2019 and 2.7% for 2020, down from the previous forecasts of 2.6% and 3% respectively.
By Ovunc Kutlu