The oil market eased on Friday and settled at a three-week low as traders worried about negative economic news from the US and China and signs of growing supply.
Brent crude futures fell by 74 cents or 1.1 per cent to settle at $68.44 per barrel, while the US West Texas Intermediate (WTI) crude futures declined by 87 cents or 1.3 per cent to trade at $65.16 per barrel. For the week, Brent was down by about 1 per cent while WTI depreciated by about 3 per cent.
New orders for US-manufactured capital goods unexpectedly fell in June while shipments of those products increased moderately, suggesting business spending on equipment slowed considerably in the second quarter.
In China, the world’s second-biggest economy and largest oil importer, fiscal revenue dipped 0.3 per cent in the first six months from a year earlier, according to the country’s finance ministry.
Developments around trade deals continued as the European Commission President Ursula von der Leyen is set to meet US President Donald Trump on Sunday in Scotland.
European Union officials and diplomats said they expected to reach a framework trade deal this weekend.
In Europe, data showed that the economy has remained resilient to uncertainty caused by a global trade war, even as European Central Bank policymakers appeared to temper market bets on no more rate cuts.
Also, expectations around interest rates continued as a focus for investors following an encounter between US President Donald Trump and US Federal Reserve Chair Jerome Powell, indicating that the US might be ready to lower interest rates.
Lower interest rates reduce consumer borrowing costs and can boost economic growth and demand for oil.
On the supply side, the US is preparing to allow partners of Venezuela’s state-run PDVSA, to operate with limitations in the sanctioned nation, starting with US oil major Chevron.
Market analysts say that could boost Venezuelan oil exports by a little more than 200,000 barrels per day, easing tightness in the heavier crude market.
The Organisation of the Petroleum Exporting Countries (OPEC) said the joint ministerial monitoring committee (JMMC) scheduled to convene on Monday does not hold decision-making authority over production levels.
A panel of OPEC and its allies (OPEC+) is to raise oil output when it meets, with the producer group keen to recover market share while summer demand is helping to absorb the extra barrels.