Oil prices in Asian trade rose slightly on Friday, supported by positive U.S. inventory data but were on track for their worst week since early-September due to concerns about weak demand.
Despite China’s GDP data showing expected growth in the third quarter, recent stimulus measures from the country fell short of expectations, dampening market sentiment.
Strong U.S. economic data also weighed on oil prices, as it suggested that interest rates may not decrease as rapidly as previously anticipated, limiting the commodity’s recovery.
However, Friday saw some positive movement in oil prices following a decrease in U.S. crude inventories, providing some relief to the market.
Investor focus remained on geopolitical tensions between Israel and Iran, with worries about potential disruptions to Iranian oil supplies adding a risk premium to crude prices.
As of 00:21 ET (04:21 GMT), Brent crude futures for December delivery rose 0.2% to $74.60 a barrel, while WTI futures increased by 0.2% to $70.32 a barrel.
Oil Faces Weekly Losses Amid Demand Concerns
Brent and WTI futures were on track to decrease by around 6% for the week, marking their worst performance since early-September.
Weak demand sentiment was exacerbated by lowered forecasts for annual demand growth from both the International Energy Agency and the Organization of Petroleum Exporting Countries, particularly due to concerns about sluggish Chinese demand.
China’s GDP Growth Meets Expectations, Stimulus Measures in the Spotlight
China’s GDP grew by 4.6% year-on-year, in line with expectations, while industrial production slightly missed estimates, resulting in a growth rate of 4.8%, still below the government’s annual target of 5%.
This data highlighted the necessity for additional stimulus actions from Beijing, as the country grapples with deflation, weak private spending, and a prolonged property market crisis.
Despite recent stimulus announcements, investors were disappointed by the lack of clarity regarding the implementation, timing, and scale of the proposed measures.
Analysis and Breakdown:
In summary, oil prices saw a slight increase in Asian trade on Friday, but were still set to experience their worst week in months due to concerns about weak demand and geopolitical tensions. China’s GDP growth met expectations, highlighting the need for further stimulus measures to address economic challenges. Investors are closely monitoring market developments and geopolitical events that could impact oil prices in the coming weeks.