Oil futures fell on Friday, posting a weekly loss of more than 7 percent after data showed China's economic growth slowed and as investors weighed mixed forecasts for the Middle East.
Brent crude futures fell $1.39, or 1.87 percent, to settle at $73.06 a barrel, while U.S. West Texas Intermediate crude fell $1.45, or 2.05 percent, to $69.22 a barrel.
Brent fell more than 7% this week, while WTI lost about 8%, their biggest weekly declines since Sept. 2, after the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025.
The economy in China, the world's largest oil importer, grew in the third quarter at the slowest pace since early 2023, but data on consumption and industrial production beat expectations in September.
China is important in the equation in terms of demand, so that's having a big impact on prices here today, said John Kilduff, a partner at Again Capital in New York, according to Reuters.
China's refinery output also fell for the sixth straight month as weak fuel consumption and lower refining margins weighed on processing operations.
“We cannot ignore the impact of electric vehicles in China,” said Neil Atkinson, an independent energy analyst based in Paris and former head of the International Energy Agency’s oil division.
There are many factors at play here, he added, the economic weakness in China, but also the move towards electrification of the transportation sector.
Electric vehicle sales in China jumped 42 percent in August to a record high of more than 1 million vehicles.
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.
Chinese data is showing tentative signs of improvement, but recent briefings on additional economic stimulus have left market participants feeling frustrated, said Rishi Rajanala, partner at Aegis Hedging.
US President Joe Biden said today that there is an opportunity to deal with Israel and Iran in a way that could potentially end their conflict in the Middle East for a while.
When Biden visited Berlin, he told reporters he had an understanding of how and when Israel would respond to the Iranian missile attack, something investors are still anxiously awaiting, Alex Hudis, an analyst at brokerage StoneX, said in a note.
Hezbollah in Lebanon announced on Friday that it had moved to a new and escalating phase in the confrontation with Israeli forces after the killing of Yahya Sinwar, head of the political bureau of Hamas.
This dashed earlier hopes today that Sinwar's death would hasten an end to an escalating war in the Middle East.
The US Energy Information Administration said on Thursday that US crude production hit a record high late last week, with output rising by 100,000 barrels per day in the week ending October 11 to 13.5 million barrels per day after hitting a previous peak of 13.4 million barrels per day two months ago.
Oil prices received support after data from the US Energy Information Administration showed that US crude oil, gasoline and distillate inventories fell last week.
U.S. retail sales rose slightly more than expected in September, and investors still see a 92 percent chance the Federal Reserve will cut interest rates in November.
