Oil prices saw a modest uptick on Friday with Brent oil rising by 51 cents to $84.58 per barrel and U.S. West Texas Intermediate crude gaining 48 cents at $82.79.
However, this small gain couldn’t offset the steep weekly losses, marking the largest decline since March.
The oil market has been grappling with a myriad of concerns, chief among them being the partial lifting of Russia’s fuel export ban, which added to existing demand fears driven by macroeconomic headwinds.
Over the past week, Brent posted a decline of approximately 11%, while WTI recorded an over 8% drop.
These declines were fueled by concerns that persistently high interest rates may slow global economic growth and dampen fuel demand.
Both Saudi Arabia and Russia announced their intention to continue supply cuts until year-end, further complicating the already delicate balance between supply and demand.
The recent boost in U.S. job growth, exceeding economists’ forecasts with a rise of 336,000 in September, has added to the uncertainty.
A robust U.S. economy could bolster near-term oil demand, but it also strengthened the U.S. dollar, increasing bets on another interest rate hike in 2023.
The ongoing uncertainty has made oil prices highly susceptible to fluctuations. Reports of increased Chinese travel activity provided some support as mid-autumn and National Day holiday travel in China rose significantly compared to the previous year.
As the market grapples with these dynamics, the price spread between gasoil and Brent futures has experienced volatility, falling to its lowest since July before rebounding slightly.
Analysts emphasize that concerns about the global economy and oil demand continue to be at the forefront of the oil market’s challenges.
