By Adedapo Adesanya
The prices of oil finished in the positive zone on Friday but recorded a weekly decline on a stronger US Dollar and fears that an economic slowdown would weaken crude demand.
Brent crude futures gained 13 cents to trade at $96.72 per barrel, while the US West Texas Intermediate (WTI) crude ended 27 cents higher at $90.77 a barrel.
However, both crude oil benchmarks fell about 1.5 per cent in the week.
Comments made by Richmond Federal Reserve President Thomas Barkin that the US central bank would balance its rate hike path with uncertainty over any impact on the economy made prices jump earlier in the session.
However, crude pared its gains as investor concerns about upcoming rate hikes settled back in.
Also, strength in the US Dollar hit a five-week high, which also capped crude gains as it made oil more expensive for buyers in other currencies.
The week was heavily marred by fears of a global economic slowdown that trumped a large crude inventory draw and signs of strong fuel (gasoline) demand in the world’s largest producer and consumer nation.
Oil prices dipped on Monday and Tuesday, following gloomy economic data out of China, stoking fears of demand in the world’s top crude oil importer.
Late on Tuesday, prices halted their slide after the American Petroleum Institute (API) reported a draw in crude inventories in the US. A day later, the EIA reported a major draw in oil inventories of 7.1 million barrels for the week to August 12, sending oil prices higher. In gasoline, the EIA estimated an inventory draw of 4.6 million barrels for last week, which compared with a 5-million-barrel decline for the previous week.
The bullish EIA report supported oil prices through Wednesday and Thursday, but on Friday, the strong US Dollar and the fears of the recession took the upper hand and crude prices fell.
Despite the constructive EIA report this week, sentiment remains largely negative, with lingering demand concerns and a potential Iranian nuclear deal casting a shadow over the market.
The Organisation of the Petroleum Exporting Countries (OPEC), however, remained optimistic about oil demand into 2023.
This is as the new OPEC secretary-general, Mr Haitham Al Ghais, said he is keen to ensure Russia remains part of the OPEC+ group, ahead of a September 5 meeting.
Supplies could tighten again when European buyers start seeking alternative supplies to replace Russian oil ahead of European Union sanctions that take effect from December 5.
