Oil’s 7-week gaining streak at risk from mounting demand concerns By Reuters

© Reuters. FILE PHOTO: An aerial view shows a crude oil tanker at an oil terminal off Waidiao island in Zhoushan, Zhejiang province, China January 4, 2023. China Daily via REUTERS/File Photo

By Shariq Khan

BENGALURU (Reuters) -Oil prices steadied on Friday but were set to post a weekly decline for the first time in eight weeks, as demand jitters around the globe outweighed recent supply concerns.

futures rose 18 cents, or 0.2%, to $84.30 a barrel by 1:54 p.m. EDT [1554 GMT], while the U.S. West Texas Intermediate (WTI) crude futures were up 27 cents, or 0.3%, to $80.66 a barrel.

Although the world’s biggest oil importer, China, could play a major role in shoring up oil demand over the rest of the year, a worsening property crisis in the country has added to concerns about its sluggish economic recovery and reduced investors appetite for risk across markets.

“Concerns for investors remain focused on the tension between slowing global growth and still-tight global supplies,” said Rob Haworth, senior portfolio manager at U.S. Bank Asset Management.

“Prices are likely to remain range-bound for now,” Haworth said, adding that demand is in question for investors worried by the weak data from China.

Concern is also mounting that the U.S. Federal Reserve has not finished raising interest rates to tackle inflation. Higher borrowing costs can impede economic growth and in turn reduce overall demand for oil.

Oil benchmarks were further depressed by seasonal demand weakness heading into the autumn, said Jay Hatfield, CEO of Infrastructure Capital Management.

Hatfield said he expects demand to hold up in China despite its slowing economy and forecast oil prices would trade between $75 to $90 a barrel over the coming months.

Both oil price benchmarks were on course to end the week about 3% lower, after Brent gained about 18% and WTI gained 20% over the seven weeks ended Aug. 11. The seven-week rally was the longest of this year for either benchmark.

It was spurred on by supply cuts from the Organization of the Petroleum Exporting Countries and allies (OPEC+).

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