Oil drops nearly 4% to end the week lower, snapping four-week win streak

Environment

A man walks on a path in front of an oil derrick near the Huntington Beach Oil Fields on April 20, 2020 in Huntington Beach, California.

Michael Heiman | Getty Images

Oil prices slipped on Friday, on track for a weekly loss, as investors’ focus shifted to lackluster demand and ample fuel supplies, offsetting support from a weak dollar.

Brent crude fell 19 cents, or 0.4%, to $43.88 a barrel by 0034 GMT, heading for its biggest weekly loss since June.

U.S. West Texas Intermediate was at $41.17 a barrel, down 20 cents, or 0.5%, set to post its first weekly drop in five weeks.

The volume of crude arriving in China, the world’s largest crude importer, is set to slow in September after rising for five straight months as its refiners gradually digest bloated inventories, according to data on Refinitiv Eikon.

In the United States, refiners awash in diesel inventory are unlikely to boost output soon.

“Soft margins are likely to cap further crude rallies and we anticipate further run cuts this fall to expedite the rebalancing of product stocks,” RBC Capital analyst Mike Tran said in a note.

Production cuts led U.S. gasoline inventories to fall at a “manic” pace in the past two months, even though U.S. mobility indicators suggest that driving patterns have largely plateaued over the past 6-8 weeks, he added.

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