Oil falls below $118, heads for 1st weekly loss in five

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Brent crude oil fell below $118 per barrel on Friday and was heading for its first weekly loss in five after disappointing euro zone growth data revived concerns about the outlook for energy demand.

Global growth prospects were also clouded by expected divisions at a meeting in Moscow of finance officials from the Group of 20 nations, 90 percent of the world's economy, over economic policy and its impact on currencies.

Economists are worried that competitive devaluations could lead to currency wars, impoverishing nations worldwide.

But the fall in oil was modest, and traders and analysts said hopes of a faster economic expansion later in the year and worries over the security of oil supplies from the Middle East were underpinning prices.

Brent futures were down 30 cents to $117.70 per barrel by 1330 GMT, heading for its first weekly loss since the first half of January. U.S. crude shed 70 cents to $96.61 per barrel.

"The euro zone data is still weighing on financial markets, including oil, but the figures are backward-looking. The most recent forward-looking indicators point to an improvement," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.

"The risks are mostly to the upside for oil: we have improving growth prospects with higher oil demand globally and supply is not rising as much."

IRAN

The euro zone slipped deeper into recession last quarter, with the steepest quarter-on-quarter drop since 2009, but other figures suggested the bloc might be starting to claw its way out of a slump and could see growth again by mid-year.

Worries over Iran's nuclear programme as well as other Middle East tensions kept a floor under oil prices.

Talks between Iran and the United Nations appear to have failed as its inspectors returned from talks in Tehran with no deal on reviving a nuclear investigation, no date for a new meeting and no signal of hope for big power diplomacy aimed at averting a war.

Concerns that the conflict could curb oil supply had eased slightly after the Middle Eastern nation appeared to be taking steps to slow the growth of stockpiles of nuclear materials that could be used to make a bomb.

Syria's civil unrest continued to worsen, as did sabre-rattling by Israel, adding to concerns about disruption of Middle Eastern supplies.

U.S. prices also found support from concerns that gasoline supplies may be reduced by refinery maintenance shutdowns, which pushed prices of the product as well as the oil complex higher.

Markets awaited a Thomson Reuters/University of Michigan survey of consumers at 1455 GMT for further pointers to the health of the U.S. economy. (Additional reporting by Ramya Venugopal in Singapore; Editing by Jane Baird)



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