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 slipped below $44 a barrel on Friday and was on course for its biggest weekly decline since June as weak demand figures added to concern over a slow recovery from the COVID-19 pandemic.
A U.S. government report showed that domestic gasoline demand fell in the latest week. Middle distillates inventories at Asia’s Singapore oil hub have soared above a nine-year high, official data showed..
Brent crude, the international benchmark, fell 41 cents, or 0.9%, to $43.66, heading for a 3% drop this week. West Texas Intermediate slipped 41 cents, or 1%, to $40.96, set for its first weekly drop in five.
“The bigger market picture is overall bearish sentiment that kicked off with lower gasoline demand reports on Wednesday,” said Paola Rodriguez-Masiu, analyst at Rystad Energy.
Oil reversed earlier gains in reaction to the U.S. dollar gaining soon after the U.S. nonfarm payrolls report showed the unemployment rate fell to 8.4%. A strong dollar makes oil more expensive to other currency holders and tends to weigh on oil prices.
“Crude prices can’t shake off the strong dollar that emerged from a strong employment report,” said Edward Moya, analyst at brokerage OANDA.
Oil has recovered since April, when Brent slumped to a 21-year low below $16 and U.S. crude briefly went into negative territory.
A record supply cut since May by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, has supported prices.
OPEC began in August to ease the scale of the cuts, raising output by almost 1 million barrels per day according to a Reuters survey.