Oil prices continued to slide on Friday, deepening their weekly losses, as a stronger U.S. dollar and worries about a potential supply glut next year weighed on the market. Brent crude fell to nearly $72 per barrel, marking a more than 2% drop for the week, while West Texas Intermediate (WTI) hovered around $68.
The International Energy Agency (IEA) dampened sentiment on Thursday, forecasting a surplus in the oil market for 2024. The IEA attributed this outlook to slowing demand growth in China and a potential increase in global oil output, particularly if OPEC+ follows through with plans to revive production cuts.
Despite these concerns, China reported some positive economic data on Friday, suggesting that Beijing’s latest round of stimulus measures has begun to benefit various sectors. However, oil demand in the country showed signs of weakness, with October’s apparent oil consumption declining year-on-year.
“While there are some positive signals in the broader economic data, we are not out of the woods yet,” said Warren Patterson, head of commodities strategy at ING Groep. He pointed out that industrial production in China fell short of expectations, and oil-specific metrics were also disappointing, with weaker refinery activity and lower implied oil demand.
The broader commodities market, including crude oil, has faced headwinds this week, as a surge in the U.S. dollar—driven by market optimism following Donald Trump’s election victory—raised the cost of raw materials for foreign buyers. The dollar is set to notch its seventh consecutive weekly gain, further pressuring oil prices.
Since mid-October, crude oil has swung between weekly gains and losses, influenced by geopolitical tensions in the Middle East, concerns about oversupply next year, and currency market fluctuations.
In the U.S., oil inventories rose by approximately 2.1 million barrels last week, exceeding industry forecasts. However, gasoline stocks saw a significant drawdown, dropping by 4.4 million barrels, bringing them to their lowest level in a decade for this time of year.
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