Oil Set for Weekly Loss on Oversupply Concerns
Oil is headed for a weekly decline, weighed down by the impact of a stronger dollar and concerns that the global market will shift into a supply glut next year.
West Texas Intermediate was steady near $69 a barrel, and more than 2% lower this week, while Brent closed above $72. The International Energy Agency said on Thursday it expects a surplus next year as demand growth in China slows while production increases. The supply glut would be even greater if OPEC+ goes ahead with a plan to revive stalled output, it said.
Commodities including crude have struggled this week as the dollar gauge strengthened to its highest level in two years, strengthening after Donald Trump’s election victory. The U.S. currency is set for a seventh weekly gain, making raw materials more expensive for most buyers. Crude has alternated weekly gains and losses since mid-October, buffeted by tensions in the Middle East, the prospect of a supply glut into next year and shifts in currency markets.
Chinese consumption is also in focus, and industrial production data due Friday will give traders fresh insight into demand trends in the top importing nation. Elsewhere, U.S. oil inventories rose by about 2.1 million barrels last week, above industry estimates. There was also a 4.4 million-barrel draw in gasoline, which cut holdings to a decade-low for now.
Source: Bloomberg
