Oil gains over 2% but records seventh weekly decline
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[December 09, 2023] By
Shariq Khan
BENGALURU (Reuters) -Oil prices rose more than 2% on Friday after U.S.
data supported expectations of demand growth, but both benchmarks fell
for a seventh straight week, their longest streak of weekly declines in
half a decade, on lingering oversupply concerns.
Brent crude futures settled at $75.84 a barrel, up$1.79, or 2.4%, while
U.S. West Texas Intermediate crude futures settled at $71.23, up $1.89,
or 2.7%.
For the week, both benchmarks lost 3.8%, after hitting their lowest
since late June on Thursday, a sign that many traders believe the market
is oversupplied.
Also fuelling the market's downturn, Chinese customs data showed its
crude oil imports in November fell 9% from a year earlier as high
inventory levels, weak economic indicators and slowing orders from
independent refiners weakened demand.
However, Friday's gains, the first in six sessions, could be a sign that
the market has found a floor for now after falling for six straight
sessions, said Phil Flynn, analyst at Price Futures Group.
"Look to step in with caution but the lows should be in," he said.
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U.S. Labor Department data released showed stronger-than-expected job
growth, signs of underlying labor market strength that should support
fuel demand in the biggest oil market.
That followed government data on Wednesday showing U.S. gasoline demand
last week lagged the 10-year seasonal average by 2.5% and gasoline
stocks rose by 5.4 million barrels, more than quintuple forecasts,
leading to gasoline prices to plummet. [EIA/S]
Like crude, U.S. RBOB gasoline futures on Friday rebounded about 3% from
two-year lows on Thursday.
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![](../images/120923PIX/busine25.jpg)
An aerial view shows an oil factory of Idemitsu Kosan Co. in
Ichihara, east of Tokyo, Japan November 12, 2021, in this photo
taken by Kyodo. Picture taken on November 12, 2021. Mandatory credit
Kyodo/via REUTERS
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"Wednesday's Energy Information Administration (EIA) report which
spurred concern of soft demand on a significant increase in gasoline
inventories, may not be as concerning in the wake of the strong jobs
report," said Rob Haworth, senior investment strategy director at
U.S. Bank Asset Management.
Offering more support to the demand enthusiasm, data showed U.S.
consumer sentiment perked up much more than expected in December.
Meanwhile, Saudi Arabia and Russia, the world's two biggest oil
exporters, on Thursday called for all OPEC+ members to join an
agreement on output cuts just days after a fractious meeting of the
producers' club.
The Organization of the Petroleum Exporting Countries and its allies
last week agreed to a combined 2.2 million barrels per day (bpd) in
output cuts for the first quarter of next year. The market has been
concerned, however, that some members may not adhere to their
commitments.
(Reporting by Shariq Khan, Paul Carsten, Stephanie Kelly and Muyu Xu;
Editing by Marguerita Choy and Cynthia Osterman)
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