(New York) Oil ended slightly higher on Friday but ended the week lower as the market worried about demand from China, whose economy is going through a period of deflation and a housing crisis.
The barrel of Brent from the North Sea, for delivery in October, gained 0.80% to 84.80 dollars but remained down 1.37% over the week.
Its US equivalent, a barrel of West Texas Intermediate (WTI), for September delivery, rose 1.06% to $81.25 but posted a weekly loss of 1.28%.
Crude prices have picked up some strength ahead of the weekend after reports of a large drawdown this week from the Cushing vats in Oklahoma where US WTI is stored.
“We sent out a drone flyby and reported that it had a significant drawdown of over 3 million barrels from Cushing’s tanks this week,” Kpler’s Matt Smith said. “This bodes well for the next inventory statement to be released next week by the U.S. Energy Information Agency (EIA),” the analyst added.
“This signals a drawdown to fuel exports from the Gulf region” of Mexico, he said, noting that US oil prices are becoming “relatively competitive with rising crude from the Middle East”.
“We are seeing purchases from Asia,” Matt Smith said.
But the evolution of black gold prices remains caught between concerns about Chinese demand and Saudi Arabia’s desire to prevent a drop in prices by reducing its production, analysts said.
“The economic difficulties facing China are weighing heavily on the mindset of investors, who are less inclined to move towards risky assets like the more volatile crude, summarized Tamas Varga, analyst at PVM Energy.
Retail sales weaker than expected in July, industrial production slowing: China even suspended the monthly publication of its detailed youth unemployment figures on Tuesday, after a record high in recent months.
On Thursday, the Chinese giant Evergrande, symbol of the real estate crisis in China, requested its placement in the United States under bankruptcy proceedings.
In the United States, the market was also keeping an eye on the climatic turbulence with storms coming from the west which could enter the Gulf region next week and delay tankers importing crude, noted Andy Lipow of Lipow Oil Associates.
