Crude oil prices posted weekly declines on Friday afternoon due to the lackluster economic recovery and oil demand concerns amid the global coronavirus pandemic crisis.
International benchmark Brent crude was trading at $44.07 at 1111 GMT on Friday, posting a 4.4% decrease from Monday at 0615 GMT when it traded at $46.10 per barrel.
American benchmark West Texas Intermediate traded at $41.45 at the same time on Friday relative to $42.97 a barrel on Monday.
Having just recovered from tropical storm Laura, which brought a halt in production to many offshore platforms and oil rigs in the Gulf of Mexico, oil markets started the week on an optimistic upturn. This was supported by China’s better than forecast official Purchasing Managers Index (PMI) data, boosting hopes that the world's second-largest economy is continuing its economic recovery from the impact of COVID-19.
A weakening dollar also helped the upward trend, encouraging oil-importing countries to purchase more crude oil at cheaper dollar prices. The value of the greenback fell to as low as $92.146 earlier Tuesday -- its lowest level since May 2018.
News of Saudi Arabia's discovery of two oil fields, however, tempered prices at a time when there is a move to bring production down to balance falling demand due to coronavirus.
The growing US manufacturing sector's economic activity instilled more hope for a sooner-than-expected economic recovery in the aftermath of the coronavirus pandemic.
Commercial crude oil inventories in the US fell more than expected by 1.8% for the week ending Aug. 28, about 14% above the five-year average for this time of year.
- Oil prices show sharpest decline since June
The week-long uptick in oil prices was suppressed after negative highlights in the US Federal Reserve's report, which highlighted uncertainty over the coming school year and slowing job growth in some districts.
Oil prices posted the sharpest decline on Friday since June at $43.72 per barrel. The fall in China's oil demand, the downturn in the US service sector’s activities, and the rise in its trade deficit to the highest level in 12 years dampened economic recovery hopes.
Although the number of US jobless claims dropped by more than expected, signaling a rise in demand, a more-than-expected fall in US commercial crude oil inventories limited further declines.
US stocks fell by 1.8% for the week ending Aug. 28, about 14% above the five-year average for this time of year.
By Sibel Morrow