Oil Caps Weekly Drop Amid Shaky OPEC Compliance, Weaker Demand - Bloomberg:
"Oil had its worst week in a month as compliance with OPEC’s deal falters and the outlook for demand worsens.
While a weaker dollar helped push prices in New York 0.5 percent higher on Friday, erasing earlier losses, futures closed 1.5 percent down for the week. The International Energy Agency reduced demand estimates for OPEC crude this year and 2018, and said there are doubts about the group’s commitment to cutting production. Even a pledge by Saudi Arabia and Iraq to strengthen their commitment to the curbs isn’t helping.
“With the latest rhetoric from the IEA, it looks like the balancing cycle is further protracted, which is not great for the market,” Michael Loewen, a strategist at Scotiabank in Toronto, said by telephone. Investors need to see either OPEC production really decline or compliance to the output-reduction deal improve to believe rebalancing is happening, he said."
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