Oil is firming, but on track for its biggest weekly loss in more than a month, according to Reuters
By Florence Tan and Trixie Yap
SINGAPORE (Reuters) – Crude oil futures firmed on Friday after strong U.S. retail sales data and the emergence of fiscal stimulus to boost China's economy, although prices were still headed for their biggest weekly loss in more than a month.
Futures gained 26 cents, or 0.4%, to $74.71 a barrel by 0648 GMT, while US West Texas Intermediate crude was at $70.96 a barrel, up 29 cents, or 0.4%.
Both contracts were steady on Thursday for the first time in five sessions after data from the Energy Information Administration (EIA) showed that oil, gasoline and distillate inventories fell last week.
Brent and WTI are expected to fall around 6% this week, the biggest weekly declines since September 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025. and ease concerns about a possible retaliatory attack by Israel. in Iran which could disrupt oil exports to Tehran.
IG market strategist Yeap Jun Rong said that although oil prices continued to decline on Friday, there were signs of an imminent recovery after the market reacted to the country's risks this past week.
“The recent occurrence of stronger-than-expected US economic data provides additional relief to growth risks, but market participants are also sidelining any needed stimulus from China, as momentum has recently emerged,” he said in an email.
US retail sales rose slightly more than expected in September, with investors still pricing in a 92% chance of a rate cut by the Federal Reserve in November. [FEDWATCH/] [US/]
Meanwhile, China's central bank launched two stimulus programs that will begin by pumping 800 billion yuan ($112.38 billion) into the stock market through newly created monetary policy tools.
This follows slow third-quarter economic growth in the world's top oil exporter, although consumption and industrial figures for September beat forecasts.
China's refining output also fell for a third straight month as weaker fuel consumption and tighter refining margins curbed refining.
Markets, however, are still worried about a possible rise in prices due to tensions in the Middle East, with the Lebanese terrorist group Hezbollah saying on Friday that it is entering a new and escalating phase of its war with Israel after the killing of Hamas leader Yahya Sinwar.
Global risks, such as developments in the Middle East, will continue to fuel fears of supply disruptions and rising oil prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
