Oil falls 7%, posts biggest weekly loss in more than a month

Oil futures fell on Friday, posting a weekly loss of more than 7%, pressured by demand concerns as China’s economy slows and supply risks from the Middle East conflict recede.

Brent crude futures fell $1.39, or 1.87%, to settle at $73.06 a barrel.

US crude futures fell $1.45, or 2.05%, to settle at $69.22 a barrel.

According to CNBC, Brent fell about 7% this week, while West Texas Intermediate lost 8%, their biggest weekly decline since September 2, after the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency lowered their forecasts for global oil demand in 2024 and 2025.

Fears eased of a possible Israeli attack on Iran that could disrupt Tehran’s oil exports.

China’s economy, the world’s biggest oil importer, grew at its slowest pace since early 2023 in the third quarter, but data on consumption and industrial output beat expectations in September.

China’s refinery throughput also fell for a sixth straight month as weak fuel consumption and falling refining margins weighed on processing operations.

China’s central bank has rolled out two financing plans that will initially inject 800 billion yuan ($112.38 billion) into the stock market through newly launched monetary policy tools.

Crude oil prices were supported after data from the U.S. Energy Information Administration showed U.S. crude, gasoline and distillate inventories fell last week.

U.S. retail sales rose slightly more than expected in September, and investors still expect a 92% chance the Federal Reserve will cut interest rates in November.

But markets remain wary of potential oil price spikes amid heightened tensions in the Middle East, with Lebanon’s Hezbollah group announcing on Friday “a new and escalating phase in the confrontation with the Israeli enemy that will be discussed in the coming days,” following the killing of Yahya Sinwar.

US President Joe Biden said on Friday that there was an opportunity to deal with Israel and Iran in a way that could potentially end their conflict in the Middle East for a while.

Alex Hudis, an analyst at brokerage firm StoneX, said in a note that Biden, when he visited Berlin, told reporters that he had an understanding of how and when Israel would respond to the Iranian missile attack, something that investors are still anxiously awaiting.