Oil posted a weekly decline as worries about demand continue to dominate market sentiment even after Saudi Arabia unilaterally promised to cut output.
West Texas Intermediate settled near $70 a barrel, closing the week below where it was before Saudi Arabia’s surprise weekend announcement. The commodity was down 2% for the week, even with the wild moves sparked by international headlines. Riyadh’s surprise decision to cut output by about 1 million barrels sparked a short-lived rally that was scaled back by demand fears.
Oil briefly fell below $70, losing nearly 5% in less than an hour, according to Middle Eastern media reports, quickly dismissed by government officials, that the US and Iran were progress in the nuclear talks. Although prices largely recovered, traders said the stampede reflected the market’s willingness to sell.
“We’ve been selling continuously for about six months to nine months,” said Jeff Currie, head of commodities research at Goldman Sachs Group Inc. in an interview with Bloomberg Television.
Benchmark US oil has fallen about 14% from a peak in mid-April on signs that China’s recovery is stalling and that the US will need to keep raising interest rates to curb inflation. In addition, Russian crude exports have been more resilient than expected, increasing supply.
Despite the flat oil price weakness, there were some blips of bullish sentiment. Money managers strengthened their bullish bets on Brent crude to a six-week high in the week ending June 6.
Prices:
- WTI for July delivery was down $1.12 to settle at $70.17 a barrel in New York.
- Brent for August settlement fell $1.17 to settle at $74.79 a barrel.
