By Peter Nurse
Investing.com -- Crude oil prices edged lower Friday, after disappointing retail sales data raised doubts about the strength of the U.S. economic recovery. That said, the market still looks set to end the second consecutive week higher.
U.S. July retail sales increased 1.2% from the prior month, slowing sharply after an upwardly revised 8.4% gain in June, according to Commerce Department data released Friday.
By 10:50 AM ET (1450 GMT), U.S. crude futures were down 0.1% at $42.22 a barrel, while the global benchmark Brent was down 0.2% at $44.88 a barrel.
These levels still represent gains for the week, with the U.S. contract currently set to rise 2.2% and the Brent contract just under 1% this week.
Prices had hit a five-month high on Wednesday after the U.S. Energy Information Administration confirmed a bigger-than-expected fall in inventories of crude, gasoline and other distillates last week.
“This is now the third consecutive week of stock declines, with inventories declining by almost 22.5MMbbls over this period,” said analysts at ING, in a research note to investors.
This prolonged reduction in inventories has helped to balance out bearish reports from both OPEC and the IEA this week. Both of these organisations cut their demand estimates for the last two quarters of this year.
“This week’s inventory data was supportive, but the next significant catalyst that the market is focused on could be the U.S. coronavirus stimulus package,” Stephen Innes, chief global market strategist at AxiCorp Ltd., said in a note, reported by Bloomberg.
That said, the market may have to wait a while for that catalyst, with Senate Majority Leader Mitch McConnell officially sending senators home Thursday for a three-week summer recess, deeming an immediate deal between the two warring factions unlikely.