Oil Posts Biggest Weekly Decline since July
(Bloomberg) -- Oil posted the biggest weekly decline since July as a rout in emerging markets raised concerns about weakening energy demand.
Futures in New York fell for a third straight session on Friday after a week-long slide in developing markets around the globe. The dollar advanced after American employers added more jobs than expected, diminishing the appeal of commodities priced in the greenback.
“This whole emerging market situation is sapping a lot of energy from commodity markets,” Bart Melek, head of global commodity strategy at TD Securities in Toronto, said by phone. “Risk appetites have waned somewhat. That’s not particularly good.”
The protracted trade dispute between the U.S. and China has cast a shadow over prospects for the economic growth that fuels energy demand. That bearish sentiment has been tempered somewhat by fears that U.S. sanctions against Iran may cripple supplies from OPEC’s No. 3 exporter.
West Texas Intermediate for October delivery fell 2 cents to settle at $67.75 a barrel on the New York Mercantile Exchange. Prices ended the week down 2.9 percent for the biggest weekly drop since mid July. Total volume traded was about 18 percent below the 100-day average.
Brent for November settlement rose 33 cents to $76.83 on the ICE Futures Europe exchange. The global benchmark crude traded at a $9.28 premium to WTI for the same month.
Some other key oil-market figures, news and events:
Gasoline futures rose 1.9 cents to $1.97 a gallon in New York. The MSCI Emerging Markets Index of equities extended losses from a January peak to just over 20 percent on Thursday, the threshold for a bear market. The index was up 0.3 percent on Friday. American wages unexpectedly climbed in August by the most since the recession ended in 2009 and hiring rose by more than forecast, keeping the Federal Reserve on track to lift interest rates this month and making another hike in December more likely. Airlines are starting to hedge against the risk that fuel prices could be driven higher by rules targeting the shipping industry’s environmental performance, lifting the price of crude futures for 2020. The crisis in emerging economies may affect oil demand but it won’t be a major factor and the International Energy Agency expects the market to tighten this year, putting upward pressure on prices.
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