Crude oil prices posted sharp declines in the week ending Sept. 11 amid fears of diminishing demand and worsening macroeconomic data, according to data compiled on Friday.
International benchmark Brent crude was trading at $39.87 at 1201 GMT on Friday, posting a 5.16% decrease from Monday at 0636 GMT when it traded at $42.04 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $37.24 at the same time on Friday relative to $39.20 a barrel on Monday.
Oil markets started the week with sharp declines in prices after Saudi Arabia’s announcement to trim October prices for its sales to the US and Saudi’s main market Asia, a move that is fuelling demand concerns amid increasing coronavirus cases worldwide.
The decline in prices were sustained by low oil consumption in Asia, Europe and North America with the end of the summer driving season, indicating that global oil demand would decrease.
The increasing number of COVID-19 cases also continued to constrain oil prices, with the global economic outlook and overall oil demand negatively affected.
As the US leads the number of cases at more than 6.3 million as of Friday afternoon, India has recorded over 4.5 million followed by Brazil with over 4.2 million cases.
Oil prices were also further pushed down due to a rise in crude inventories as a result of the refinery maintenance season when refiners shut down their plants for repair during fall or spring.
-Worsening macroeconomic data, no relief
An unforeseen 2 million-barrel increase in US commercial crude inventories compared to expectations of a 1.4 million-barrel draw exerted more pressure on the already falling oil prices, reflecting diminishing demand.
Another blow to the decreasing oil prices was the worse-than-expected US macroeconomic data and fading hopes of a US stimulus package approval to revive the economy from the negative effects of the coronavirus pandemic, as Democrats blocked the last voting for what they described as “a skinny” 1 trillion relief package.
US jobless claims stayed unchanged at 884,000 last week, however, the number is still above the pre-pandemic record of 695,000 and the current expectation of 846,000.
On Wednesday, the EIA revised up its Brent crude oil price forecast for 2020 by $0.48 per barrel in its monthly Short-Term Energy Outlook (STEO) report for September.
The international benchmark is now expected to average $41.90 per barrel this year, up from its previous estimate of $41.42 a barrel.
By Sibel Morrow