10.07.2015 21:15:01
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Crude Oil Ends Lower, Drops 7.4% For Week
(RTTNews) - U.S. crude oil ended slightly lower Friday, on demand growth concerns after the International Energy Agency latest forecast showed waning demand for crude oil next year. The agency also warned of a drop in prices with Iran scheduled to re-enter the market.
For the week, crude oil futures dropped about 7.4 percent.
Iran failed to meet the deadline for an agreement on its nuclear program with the West, but is expected to flood markets after sanctions are lifted. Nevertheless, analysts believe it could take some time before Iranian crude begins to flow into global markets after sanctions are lifted.
"The bottom of the market may still be ahead," as Iran oil could come to markets and OPEC keeps pumping, the IEA said in its closely watched monthly oil-market report.
The International Energy Agency has forecast global oil demand growth to slow to 1.2 million barrels a day in 2016, compared to an average of 1.4 million barrels a day this year.
The IEA also estimates OPEC crude oil output to have risen by 0.34 million barrels a day in June to 31.7 million barrels a day. This is the highest level of output since April 2012 and about 1.7 million barrels a day higher than the target production agreed last month.
The increase in OPEC output was attributed to record production in Iraq, Saudi Arabia and the United Arab Emirates.
Nonetheless, crude oil's losses were limited amid optimism of deal between Greece and its creditors, with last-ditch efforts on to keep Greece in the monetary union.
Greece has threatened to go it alone unless its receives less punitive terms for bailout funds that will help the nation avoid a default on its sovereign debt. Both Greece and its creditors have been digging in their heels, although reports indicate a deal may be on the cards today.
Light Sweet Crude Oil futures for August delivery, the most actively traded contract, dipped $0.04, to settle at $52.74 a barrel on the New York Mercantile Exchange Friday.
Crude prices for August delivery scaled a high of $53.89 a barrel intraday and a low of $51.96.
On Thursday, crude oil prices climbed $1.13 or 2.2 percent, to settle at $52.78 a barrel, with no deal between Iran and the West in sight and rebounding global equity markets easing concerns of a slowdown in the global economy.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.02 on Friday, down from its previous close of 96.27 on Thursday in late North American trade. The dollar scaled a high of 96.40 intraday and a low of 95.45.
The euro trended higher against the dollar at $1.1136 on Friday, as compared to its previous close of $1.1038 in North American trade late Thursday. The euro scaled a high of $1.1216 intraday and a low of $1.1032.
In economic news, wholesale inventories in the U.S. increased much more than expected in May, a report from the Commerce Department showed Friday. Wholesale inventories increased by 0.8 percent in May after rising 0.4 percent in April. Economists expected inventories to rise by 0.3 percent.
From Europe, Germany's wholesale prices continued to decline in June, figures from Destatis showed Friday. Wholesale prices dropped 0.5 percent year-on-year in June, slightly faster than May's 0.4 percent fall. The wholesale price index has been falling since July 2013.
French industrial output recovered as expected in May, the statistical office Insee reported Friday. Industrial output grew 0.4 percent month-on-month in May, reversing a 0.8 percent fall in April. This was the fastest growth in three months. The monthly rate matched economists' expectations.
Britain's trade deficit in goods in May was the smallest in nearly two years as imports declined and exports remained unchanged, data from the Office for National Statistics showed Friday. The visible trade deficit for May was GBP 8 billion, which was the smallest shortfall since June 2013. It was also smaller than the GBP 9.7 billion deficit predicted by economists.
U.K. construction output declined for the second straight month in May, defying economists' expectations for an increase, data from the Office for National Statistics showed Friday. Construction output fell 1.3 percent month-over-month in May, faster than previous month's 0.5 percent drop. Economists expected an increase of 0.8 percent for the month.