Investing.com-- Oil prices fell to a weekly loss after settling sharply lower Friday, as dollar strength and ongoing concerns about demand from top oil importer China offset ongoing signs of improving domestic demand.
At 14:30 ET (18:30 GMT), West Texas Intermediate crude futures fell $2.48 to settle at $80.34 a barrel, Brent oil futures fell 2.7% to $82.80 a barrel
China demand concerns, dollar strength weigh amid few stimulus signals
Concerns over sluggish demand in the world’s biggest oil importer remained front and center, following softer-than-expected growth figures for the second quarter.
The readings came after data last week showed a decline in China’s oil imports in June.
Weak readings on the Chinese economy also came as the Third Plenum of the Chinese Communist Party, which began earlier in the week, yielded few cues on plans for any more stimulus measures.
Sentiment towards China was further dented by reports earlier this week suggesting that the U.S. was planning stricter trade restrictions on the country’s technology sector- a move that stands to attract retaliatory measures from Beijing. Speculation over a Donald Trump presidency also further soured sentiment towards China, given that Trump has maintained largely protectionist policies.
Trump also said that he will push for increasing U.S. oil production - a move that could herald higher supply in the coming years.
A stronger dollar also weighed on oil prices as investors continued to digest remarks from Federal Reserve ahead of the blackout period starting Saturday.
Tighter markets, rate cut hopes offer oil some support
But expectations of tighter oil markets in the near-term offered crude some support. U.S. inventories shrank for a third straight week as travel and fuel demand picked up in the summer months.
The prospect of interest rate rate cuts by the Federal Reserve also buoyed crude, given that such a scenario presents better conditions for economic growth and oil demand.
Outside the U.S., continued geopolitical ructions between Hamas and Israel, coupled with Houthi aggression in the Red Sea (NYSE:SE), kept some risk premia priced into oil markets.
"The oil market is once again relatively rangebound,"said analysts at ING, in a note. "To the upside, growing Chinese demand concerns are capping the market, following a raft of data earlier this week suggesting a softer demand picture. To the downside, expectations of a tight market through the third quarter continue to provide a floor to prices."
On the supply front, meanwhile, the number of oil rigs fell by one to 477 from a week ago, Baker Hughes reported Friday.
(Peter Nurse, Ambar Warrick contributed to this article.)