HOUSTON, July 6 (Xinhua) -- Oil prices lost ground for the week ending July 5, with the price of West Texas Intermediate (WTI) for August delivery decreased 1.64 percent and Brent crude oil for September delivery went down 0.79 percent for the week.
WTI closed the week at 57.51 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 64.23 dollars a barrel on the London ICE Futures Exchange. WTI and Brent have increased 26.65 percent and 19.39 percent, respectively, so far this year.
During the week, WTI and Brent moved in the same direction. The decrease of oil prices showed that the market was concerned about a slowing U.S. economic growth despite the agreement of OPEC and other major oil producers earlier this week to extend the ongoing deal to curb oil production for another nine months.
Oil prices increased on Monday as investors expected major oil exporting countries to extend an output cut deal. WTI gained 0.62 dollar to settle at 59.09 dollars a barrel, while Brent crude added 0.32 dollar to close at 65.06 dollars a barrel.
On Tuesday, oil prices plunged as weak U.S. manufacturing data prompted investors' concerns over weak crude oil demand. Both of the benchmarks lost more than 2 dollars, with WTI decreasing 2.84 dollars to settle at 56.25 dollars a barrel and Brent crude down 2.66 dollars to close at 62.40 dollars a barrel.
On Wednesday, oil prices rebounded, recovering from a steep fall in the previous session as latest data eased investors' worries over an oversupply. Both WTI and Brant gained more than one dollar, with WTI increasing 1.09 dollars to settle at 57.34 dollars a barrel and Brent crude up 1.42 dollars to close at 63.82 dollars a barrel.
On the day, the U.S. Energy Information Administration (EIA) reported 1.1 million barrels decrease of crude oil inventories during the week ending June 28.
The U.S. market was closed on Thursday for Independence Day holiday.
Oil prices climbed on Friday as tensions over Iran came under the spotlight. WTI gained 0.17 dollar to settle at 57.51 dollars a barrel while Brent crude increased 0.93 dollar to close at 64.23 dollars a barrel.
Oil prices have kept gaining momentum since the start of the year due to some geopolitical concerns and OPEC's decision of production cut. The momentum has slowed down recently, mainly because of the concerns over downturn in demand for crude oil.
The slowing global economy continues to be a major headwind for crude oil. The slower economic growth of the world, mainly due to the ongoing trade tensions between the United States and China, will lead to less demand for oil, which in turn would put downward pressure on oil prices.
Moreover, a rising U.S. dollar in the past months has dragged down the greenback-denominated crude futures, as the U.S. Dollar Index has been keeping uptrend since mid-2018. U.S. Dollar Index closed the week at 97.17.
The U.S. Dollar Index is a measure of the value of the U.S. dollar relative to a basket of foreign currencies. Oil is mostly traded in dollar all over the world and a stronger dollar pressures the oil demand.
In the near future, analysts believe the ease of U.S.-China trade tensions will bring more confidence to the market. Despite the decision by the OPEC and other oil producing countries to extend production cuts until the end of first quarter of 2020 was in line with expectations, it remains another key driver sustaining prices in the longer run. Also, the market will keep a close eye on the U.S.-Iran relations.
In the coming week, investors will closely monitor the U.S. economic data as investors were worried that less robust manufacturing activity would lead to weaker crude oil demand and further increase the possibility of oversupply. Also, the EIA's latest report of less-than-expected U.S. crude oil inventories and higher oil production undermine any serious bull run in oil prices.
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