U.S. Oil Prices Sag 10% As Demand Weakens

Oil prices fell sharply in the week as mounting concerns about weakening fuel demand in China outweighed fears that Russian supply could drop next month when tighter EU sanctions on its crude exports come into force, Derek Bower and George Steer reported for Financial Times.

Photo Insert: US oil prices fell by more than 4 percent to $78.50 a barrel earlier in the day, to what was the lowest price since September.

West Texas Intermediate (WTI), the US benchmark, lost about 10 percent this week, falling 1.9 percent on Friday to settle at $80.08 a barrel. It was the biggest weekly loss since March.

US oil prices fell by more than 4 percent to $78.50 a barrel earlier in the day, to what was the lowest price since September.

The WTI futures curve also switched into mild contango — a market structure in which the forward price of a contract is more expensive than the spot price, and which reflects perceptions of oversupply. Brent crude, the international marker, fell about 9 percent in the week, losing 2.4 percent on Friday to settle at $87.62.

Friday’s sell-off left US oil prices down about 14 percent below the highs struck in October after the Opec+ cartel defied US pressure to announce a plan to cut production in a bid to prop up a weakening crude market.

Earlier this week, the International Energy Agency trimmed its forecast for global oil consumption growth next year, citing a “myriad of headwinds” for demand, including “rising recession odds, China’s persistently weak economy, Europe’s energy crisis” and the strengthening dollar.

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