Oil prices have dropped about two per cent, weighed down by falling US stock markets, while weak economic data from China pointed to lower fuel demand in the world’s biggest oil importer.
Brent crude futures fell $US1.17 to settle at $US60.28 a barrel, a 1.90 per cent loss.
US West Texas Intermediate crude futures lost $US1.38 to settle at $US51.20 a barrel, a 2.62 per cent loss.
Global benchmark Brent posted a weekly loss of almost 2.3 per cent, while WTI declined nearly 2.7 per cent.
‘The oil complex remains vulnerable to heavy selling into the equities especially when combined with a strengthening in the US dollar as is the case so far today,’ Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
US equity markets broadly fell as China’s November retail sales grew at their weakest pace since 2003 and industrial output rose the least in nearly three years.
The report added to nerves about US-China trade relations.
Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, though runs were 2.9 per cent above year-ago levels.
‘Oil came under pressure out of poor economic data from China overnight, dampening enthusiasm for good oil demand growth in 2019 in light of a currently oversupplied market,’ said Andrew Lipow, president of Lipow Oil Associates in Houston.
Concerned by mounting oversupply, the Organisation of the Petroleum Exporting Countries and other oil producers, including Russia, agreed last week to reduce output by 1.2 million barrels per day, or more than one per cent of global demand.
US energy firms cut four oil rigs in the week to December 14, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
The data is seen as an indicator of future production.
The International Energy Agency said on Thursday it expected a deficit in oil supply by the second quarter of next year, provided OPEC members and other key producers stuck closely to last week’s deal to cut output.
As part of the agreement, de facto OPEC leader Saudi Arabia plans to reduce its output to 10.2 million bpd in January.
The IEA kept its 2019 forecast for global oil demand growth at 1.4 million bpd, unchanged from its projection last month, and said it expected growth of 1.3 million bpd this year.
Barclays said on Friday it expects oil prices to rebound in the first half of 2019 on falling inventories, Saudi Arabia’s export cuts and an end to the Iran sanction waivers.
Hedge funds cut bullish wagers on US crude to the lowest levels in more than two years in the week to December 11, the US Commodity Futures Trading Commission said on Friday.