Oil prices edged up for the week ending Nov. 15, with the price of West Texas Intermediate (WTI) for December delivery up 0.84 percent and Brent crude oil for January up 1.26 percent.
WTI closed the week at 57.72 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for January finished the week at 63.30 dollars a barrel on the London ICE Futures Exchange.
WTI and Brent crude prices have increased 27.11 percent and 17.66 percent, respectively, so far this year, falling from their peak levels in April when the growth of WTI hit over 40 percent, and Brent crude over 30 percent.
On Monday and Tuesday, oil prices declined as traders awaited more clues concerning global trade with WTI down 0.44 dollar and Brent crude down 0.45 dollar, respectively.
On Thursday, oil prices pulled back slightly after data showed a hefty weekly rise in U.S. crude stocks.
U.S. crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 2.219 million barrels during the week ending Nov. 8, beating analysts’ expected growth of 1.649 million barrels, which implies weaker demand and bearish for crude prices.
However, the gains on Wednesday and Friday outpaced the drops amid expectations of improved demand for the energy and concerns over downtrend of U.S. drilling rigs.
Oil prices got some support on Wednesday after U.S. Federal Reserve Chair Jerome Powell said the current stance of U.S. monetary policy is “likely to remain appropriate” as long as the U.S. economy stays on track.
Meanwhile, on Friday, Houston-based Baker Hughes reported that the number of active drilling rigs in the United States decreased by 11 to 806 for week ending Nov. 15, down 276 compared to the same period last year.
Oil prices have kept gaining momentum since the start of the year due to some geopolitical concerns and the OPEC’s decision of production cut. However, the momentum has slowed down, mainly because of the concerns over downturn in demand for crude oil.
The slowing global economy continued to be a major headwind for crude oil. The slower economic growth of the world will lead to less demand for oil, which in turn would put downward pressure on oil prices.
Moreover, a rising U.S. dollar in the past months has dragged down the greenback-denominated crude futures as the U.S. Dollar Index has been keeping uptrend since mid-2018, although the U.S. Dollar Index ended the week slightly lower. Analysts expected the index may fall below 98.00 level next week, finding supports at 97.80 and 97.50 levels.
For the coming week, the investors will continue to pay close attention to clues concerning market demand and global trade, while the U.S.-China trade talk continues to keep its firm grip over the market.
During the week, both OPEC and the International Energy Agency (IEA) released their latest reports for the industry. According to its November Monthly Oil Market Report (MOMR), the OPEC forecast that the global economic growth remains unchanged at 3.0 percent for 2019 and 2020.
In its report, OPEC mentioned some positive elements, including signs of improving trade relations between the United States and China, but it also warned that trade-related issues and the associated uncertainties remain.
In the meantime, IEA reported that weak demand and rising non-OPEC supply presents a “major challenge” to OPEC next year.—Xinhua