Oil prices stabilized on Friday following robust U.S. retail sales data, but mixed economic indicators from China raised concerns about demand, leading prices toward their largest weekly decline in over a month.
By 03:38 GMT, Brent crude futures had risen by 8 cents, or 0.1 percent, to $74.53 a barrel, while U.S. West Texas Intermediate crude increased by 15 cents, or 0.2 percent, to $70.82 a barrel. Both contracts saw an uptick on Thursday, marking the first gain in five sessions, after the Energy Information Administration (EIA) reported a decrease in U.S. crude oil, gasoline, and distillate inventories last week.
Weekly decline forecast
Despite this, Brent and WTI are poised for a roughly 6 percent decline this week, marking their steepest weekly drop since September 2, following OPEC and the International Energy Agency’s downward revisions of their forecasts for global oil demand in 2024 and 2025.
U.S. retail sales performance
U.S. retail sales in September rose slightly more than anticipated, with investors continuing to factor in a 92 percent likelihood of a Federal Reserve rate cut in November.
Read more: Oil prices modestly recover amid unexpected U.S. inventory draw, Middle East tensions
China’s economic growth concerns
In contrast, China’s third-quarter economic growth marked its slowest rate since early 2023. While consumption and industrial output figures for September exceeded expectations, the overall data presented a mixed picture. The country now officially falls short of its 5 percent growth target for the year, and the lack of a significant fiscal stimulus has led to concerns about future oil demand, as noted by IG’s Yeap.
Additionally, China’s refinery output has decreased for the third consecutive month, attributed to weak fuel consumption and narrow refining margins limiting production.
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