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Brent crude futures were down 76 cents, or 0.8%, at $93.81 a
barrel at 1044 GMT while U.S. West Texas Intermediate (WTI)
crude futures fell 85 cents, or 1%, to $88.26.
The Brent and WTI contracts both oscillated between positive and
negative territory on Friday but were down more than 4%over the
week after two weeks of gains on concern over the global
economy.
China, the world's largest crude oil importer, has been fighting
COVID flare-ups after a week-long holiday. The country's
infection tally is small by global standards, but it adheres to
a zero-COVID policy that is weighing heavily on economic
activity and thus oil demand.
The International Energy Agency (IEA) on Thursday cut its oil
demand forecast for this and next, warning of a potential global
recession.
U.S. core inflation recorded its biggest annual increase in 40
years, reinforcing views that interest rates would stay higher
for longer with the risk of a global recession. The next U.S.
interest rate decision is due on Nov. 1-2.
"The significant downward corrections of (oil) demand forecasts,
above all for next year, have been depressing prices,"
Commerzbank analysts said.
"We envisage little further downside potential, however. The
market is set to be just about balanced despite weaker demand in
the first half of the year due to the OPEC+ production cuts."
The Organization of the Petroleum Exporting Countries and
allies, together known as OPEC+, last week announced a 2 million
barrel per day (bpd) cut to oil production targets.
Underproduction among the group means this will probably
translate to a 1 million bpd cut, the IEA estimates.
Saudi Arabia and the United States, meanwhile, have clashed over
the decision.
Oil prices were also supported by a steep drawdown in U.S.
distillate stocks, though there has been a larger than expected
surge in U.S. crude oil in storage. [EIA/S]
(Reporting by Shadia NasrallaAdditional reporting by Emily Chow
in SingaporeEditing by David Goodman and David Evans)
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