Investing.com - Crude oil futures fell on Friday, as worries over the health of the global economy added to the concerns that a global supply glut may stick around for longer than anticipated.
On the ICE Futures Exchange in London, Brent for October delivery tumbled $1.07, or 2.11%, to close at $49.61 a barrel. For the week, London-traded Brent futures lost 44 cents, or 0.88%, amid fears of a China-led global economic slowdown.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in October shed 70 cents, or 1.5%, on Friday to end at $46.05 a barrel. Despite Friday's losses, New York-traded oil futures rose $1.05, or 1.84%, on the week, amid indications U.S. oil drillers are cutting back on production following a collapse in prices over the summer.
Industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. decreased by 13 last week to 662, the first weekly decline in seven weeks.
The spread between the Brent and the WTI crude contracts stood at $3.56 a barrel by close of trade on Friday, below Thursday's level of $3.98.
The European Central Bank lowered its growth forecast and inflation outlook on Thursday, citing slowing growth in China and weak oil prices.
Meanwhile, data in the U.S. on Friday showed that the economy added fewer jobs that expected last month, despite a decline in the unemployment rate.
The Labor Department reported that the U.S. economy added 173,000 jobs in August, below forecasts for an increase of 220,000 and slowing from gains of 245,000 a month earlier.
However, the unemployment rate dropped from 5.3% to 5.1%, better than expectations for 5.2% and the lowest since April 2008.
The jobs report failed to provide much clarity on when the Federal Reserve will decide to raise short term interest rates.
China's slowing economy and global market volatility have created fresh uncertainty over whether the U.S. central bank will start hiking interest rates later this month.
The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Chinese stock markets were closed on Thursday and Friday for the World War Two Victory Day parade and will reopen Monday, while U.S. markets will be closed on Monday for the Labor Day holiday.
Crude oil prices have been under heavy selling pressure in recent months, as ongoing concerns over a glut in world markets drove down prices.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
In the week ahead, investors will be looking ahead to Friday’s U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy and the likelihood of a near-term interest rate hike.
Markets will also be watching a raft of Chinese economic data, including a report on the trade balance as well as data on consumer price inflation.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 7
Markets in the U.S. are to remain closed for the Labor Day holiday.
Tuesday, September 8
China is to release data on the trade balance.
Wednesday, September 9
The American Petroleum Institute, an industry group, is to publish its weekly report on oil supplies.
Thursday, September 10
China is to release figures on consumer and producer price inflation.
The U.S. is to release data on initial jobless claims as well as a weekly government report on crude oil inventories.
Friday, September 11
The International Energy Agency will release its monthly report on global oil supply and demand.
The U.S. is to round up the week with data on producer prices and consumer sentiment.