WTI closed the week at 55.63 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 62.47 dollars a barrel on the London ICE Futures Exchange. WTI and Brent crude have increased 22.51 percent and 16.12 percent, respectively, so far this year.
During the week, WTI and Brent moved in the same directions with a momentum of downtrend. The prices of crude oil rose on global exchanges Friday as geopolitics intruded on daily deals, with traders troubled by Middle East military tensions.
However, compared with the losses in the previous sessions, the gains were modest.
Oil prices fell on Monday, as investors digested news that Iranian President Hassan Rouhani said the country would be ready to hold negotiations with the United States if Washington lifted sanctions against Tehran.
Oil prices declined significantly on Tuesday after reports that U.S. Secretary of State Mike Pompeo said Iran was ready to negotiate on its missiles.
Meanwhile, oil prices lost certain support as oil firms in the Gulf of Mexico began restoring some of their production that was shut down due to Hurricane Barry over the weekend.
The WTI decreased 0.63 dollar and 1.96 dollars to 59.58 dollars a barrel and 57.62 dollars a barrel, respectively, on Monday and Tuesday, while Brent crude lost 0.24 dollar and 2.13 dollars to 66.48 dollars a barrel and 64.35 dollars a barrel, respectively.
On Wednesday, oil prices extended losses after data showed U.S. crude oil inventories decreased.
According to the Weekly Petroleum Status Report released by the U.S. Energy Information Administration (EIA) on Wednesday, U.S. crude oil inventories decreased by 3.11 million barrels in the week ending July 12 to 455.9 million barrels, which was more than the expected drop of 2.69 million barrels, implying weaker demand and bearish for crude prices.
Oil prices also lost some support amid signs of potential progress toward negotiations between Washington and Tehran.
The WTI fell 0.84 dollar to settle at 56.78 dollars a barrel, while Brent crude dropped 0.69 dollar to close at 63.66 dollars a barrel.
Oil prices finished with significant losses on Thursday, pressured by fears of waning fuel demand.
The WTI fell 1.48 dollars to settle at 55.30 dollars a barrel, while Brent crude dropped 1.73 dollars to close at 61.93 dollars a barrel.
On Friday, oil prices rebounded amid new concerns over tensions in the Middle East, which may disrupt the flow of crude.
Iran's Islamic Revolution Guards Corps (IRGC) on Friday seized British oil tanker Stena Impero in the Strait of Hormuz, an IRGC statement said.
The WTI rose 0.33 dollar to settle at 55.63 U.S. dollars a barrel, while Brent crude gained 0.54 dollar to close at 62.47 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 continued 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.
Analysts believed slowing global demand for oil, particularly from China, will tamp down oil prices, unless geopolitical tensions continue to escalate.
"Prices are determined by the markets. If we see the market today, we see that the demand is slowing down considerably," Fatih Birol, the executive director of the International Energy Agency (IEA), said on Friday, adding "oil from the U.S., Iraq, Brazil, and Libya is flooding the market."
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.
For the week ending July 19, U.S. Dollar Index recovered on Friday as bulls lift the market above the 97.00 handle, suggesting bullish momentum in the near term.
Oil is mostly traded in dollar all over the world and a stronger dollar pressures the oil demand.
Analysts told Xinhua that tensions in the Middle East will likely impact oil prices next week.
"Oil held up in Friday afternoon trading," Tom Kool, editor of Oil and Energy Insider, told Xinhua. "The Trump administration is struggling to find willing partners in its effort to increase surveillance and patrolling in the Persian Gulf to head off tanker attacks. Other countries are balking because they fear the plan will only ratchet up tension."
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