crude oil saw a choppy trade Friday morning, with Brent holding below $98 a barrel and West Texas Intermediate slightly lower, but both benchmarks were set for their first weekly gain in three weeks.
The oil sentiment was mixed by the end of the week on growing speculation that the Organization of Petroleum Exporting Countries would cut its production target next year, as global supplies exceeded demand in the past period. In August, Saudi Arabian crude supplies saw the biggest reduction since 2012, while Libyan output was cut again this week amid escalating violence in the country.
As of 04:58 am ET:
- WTI crude for October delivery fell 0.71% to $92.44 a barrel on the New York Mercantile Exchange
- Brent Crude for October delivery fell 0.32% to $97.39 in the ICE Exchange in London
The market is unlikely to enjoy a bullish closing amid growing weakness in the world`s top consuming countries given uncertainty about the demand outlook and especially from China and Europe. This week, the OECD cut its growth forecast for major developed economies to 0.8% this year from 1.2%.
Also this week, an Energy Information Administration (EIA) report said that the U.S. crude oil stockpiles have increased more than expected by 3.7 million barrels to 362.3 million barrels in the week ended September 12. analysts had called for a decrease of 1.5 million barrels.
A sronger dollar continues to weigh on commodities especially the dollar-denominated. The USDIX which tracks the perfromance of the greenback agains a six-currency basket traded around 84.46 rebounded from yesterday`s slide and setting a session high of 84.59.