Oil falls to lowest close since March, down a fourth week
NEW YORK – Brent and U.S. crude futures settled on Friday at their lowest since March and posted their fourth straight weekly decline as weak economic data from China and a rise in U.S. oil drilling rigs applied pressure.
U.S. energy firms added 21 oil rigs this week after pulling seven rigs last week, oil services company Baker Hughes Inc said.
The rig count data arrived a day after U.S. crude fell into bear market territory, as a drop of 21 percent from its June 10 close at $61.43 a barrel indicated the market’s prevailing negative sentiment.
China’s factory sector contracted in July by the most in 15 months, a preliminary private survey showed. The weaker-than-expected result followed a stock market slide that began in June.
Brent September crude fell 65 cents to settle at $54.62 a barrel, the lowest close since March 19 and off 4.3 percent for the week. The $54.30 session low was the lowest front-month price since April 2.
U.S. September crude fell 31 cents to end at $48.14, its lowest settlement since March 31 and down 5.5 percent for the week. The session low of $47.72 was the lowest intraday price since April 1.
“Crude was already lower on concerns about the global economy and the rig count added to the negativity,” said Phil Flynn, analyst at Price Futures Group in Chicago.
The world’s top oil companies are set to report second-quarter earnings showing another drop in profits that could force more spending cuts, according to analysts.
The dollar’s strength also applied pressure, as a stronger U.S. dollar makes greenback-denominated oil more expensive for consumers using other currencies.
Brent and U.S. crude have so far clocked double-digit losses in July. With U.S. crude off 19 percent, it could challenge December’s 19.4 percent drop, which was the biggest monthly slump since the financial crisis in 2008.
Money managers cut their net long futures and options positions in the week to July 21, the U.S. Commodity Futures Trading Commission said.
Demand for gasoline has been strong, keeping refineries churning at high utilization rates, but August U.S. RBOB gasoline futures settled below its 200-day moving average of $1.8514 a gallon on Friday.
“This looks like profit-taking as the end of the U.S. driving season gets closer,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
The 5 percent weekly drop was gasoline’s biggest since mid-March and the sixth consecutive weekly slide, most since the seven weeks ending Jan. 9. – Reuters