15 stocks further weaken the NGX index by 0.35%
By Adedapo Adesanya
Oil prices ended in the positive zone on Friday but saw a weekly decline on a stronger US dollar and fears that an economic slowdown would weaken demand for crude.
Brent crude futures gained 13 cents to trade at $96.72 a barrel, while U.S. West Texas Intermediate (WTI) crude ended up 27 cents at $90.77 a barrel.
However, both crude oil benchmarks fell around 1.5% over the week.
Comments from Richmond Federal Reserve Chairman Thomas Barkin that the U.S. central bank would balance its rate hike path with uncertainty about any impact on the economy sent prices surging earlier in the session.
Crude pared its gains, however, as investor concerns over upcoming rate hikes subsided.
Additionally, the strength of the US dollar hit a five-week high, which also capped crude’s gains as it made oil more expensive for buyers in other currencies.
The week was heavily marred by fears of a global economic slowdown which outweighed strong crude consumption and signs of strong fuel (gasoline) demand in the world’s largest producing and consuming nation.
Oil prices fell on Monday and Tuesday, following dismal economic data from China, stoking fears of demand from the world’s top crude oil importer.
Late Tuesday, prices halted their slide after the American Petroleum Institute (API) reported falling crude inventories in the United States. A day later, the EIA reported a major drop in oil inventories of 7.1 million barrels for the week to August 12, pushing oil prices higher. In gasoline, the EIA estimated an inventory draw of 4.6 million barrels for the past week, compared to a decline of 5 million barrels the previous week.
The bullish EIA report supported oil prices through Wednesday and Thursday, but on Friday, US dollar strength and recession fears took over and crude prices fell.
Despite the constructive report from the EIA this week, sentiment remains largely negative, with lingering concerns over demand and a possible Iranian nuclear deal casting a shadow over the market.
The Organization of the Petroleum Exporting Countries (OPEC), however, remained optimistic about oil demand through 2023.
This is how the new Secretary General of OPEC, Mr. Haitham Al Ghais, declared that he wanted Russia to remain part of the OPEC+ group, before a meeting on September 5.
Supplies could tighten again as European buyers start looking for alternative supplies to replace Russian oil ahead of European Union sanctions that come into effect on December 5.