Oil heads for weekly loss amid recession fears

Oil prices fell today, Friday, after two days of gains, and crudes are on the way to incur a weekly loss, due to pressures from strong dollar and fears of a global economic slowdown.

Brent crude futures fell 97 cents, or 1%, to $95.62 a barrel by 0826 GMT. US West Texas Intermediate crude also recorded $89.59 a barrel, down 91 cents, or 1%, Reuters reported.

The two benchmark contracts are heading to record weekly loss of nearly 3%.

The dollar’s strength increased the cost of oil to holders of other currencies, while Asian and European stocks witnessed a decline.

In a sign that the oil supply bottleneck is easing, the gap between the spot price of Brent and the second nearest expiry month for futures contracts is about five dollars less than at the end of July.

Moreover, US crude stocks fell sharply, with the export of a record amount of five million barrels of oil per day in the last week, with oil companies receiving requests from European countries seeking to compensate for Russian crude.

Haitham Al-Ghais, the new Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), said he is optimistic about oil demand next year.

He added before a meeting to be held on the fifth of September that OPEC is keen to ensure that Russia remains within the OPEC + alliance.