Oil prices experienced a decline on Friday, poised for a second consecutive weekly drop, as investor sentiment faltered and the U.S. dollar strengthened.
Brent crude futures fell by 51 cents, or 0.6%, settling at $84.50 per barrel by 0035 GMT. U.S. West Texas Intermediate (WTI) crude futures decreased by 72 cents, or 0.9%, to $82.10 per barrel.
The U.S. dollar index rose for the second day, bolstered by stronger-than-expected data on the U.S. labor market and manufacturing earlier this week. A stronger dollar tends to reduce demand for oil priced in dollars from international investors.
Adding to the pressure, China’s recent third plenum offered no substantial stimulus measures, impacting commodities negatively. The Chinese economy grew at a slower-than-anticipated rate of 4.7% in the second quarter, raising concerns about future oil demand.
In Japan, core inflation increased in June, potentially paving the way for an interest rate hike in this significant oil market.
“Crude oil prices are under pressure amid a general risk-off sentiment across financial markets,” said ANZ analyst Daniel Hynes.
For the week, Brent crude is on track to decline approximately 0.5%, while WTI is down around 0.1%.
Despite some support from recent U.S. data showing a larger-than-expected drop in oil inventories, broader inventory trends appear bearish. Consultancy FGE noted that crude stock draws have been slower than usual for this time of year and global fuel stocks increased last week.
Additionally, sources have indicated that the OPEC+ producer group is unlikely to alter its output policy, including plans to begin unwinding one layer of oil output cuts from October.
