Oil Set for Biggest Weekly Loss Since July as Mideast Risk Fades - Bloomberg:
Oil headed for its largest weekly loss since July as the prospect of an immediate confrontation between the U.S. and Iran abated, allaying fears of disruption to Middle East energy supplies.
Futures soared to an eight-month high to top $65 a barrel in New York on Jan. 8 as Washington and Tehran faced-off after the killing of a top Iranian general. But prices retreated as the two adversaries backed away from a full-scale conflict. Crude is now trading back below $60 and is headed for about a 6% loss for the week.
“Prices are still sliding because of the easing in tensions in the Middle East,” said Michael Loewen, director of commodity strategy at Scotiabank. “That’s draining the supply risk premium that was injected into the market starting with the killing of the Iranian general.” Data from the U.S. showed the supplies are plentiful, not only in crude but also in products, he added.
U.S. crude inventories increased by 1.16 million barrels last week despite expectations for a decline, and gasoline stockpiles hit a 10-month high, government data showed on Jan. 8. Combined, weekly crude and product inventories swelled nearly 15 million barrels.
Oil headed for its largest weekly loss since July as the prospect of an immediate confrontation between the U.S. and Iran abated, allaying fears of disruption to Middle East energy supplies.
Futures soared to an eight-month high to top $65 a barrel in New York on Jan. 8 as Washington and Tehran faced-off after the killing of a top Iranian general. But prices retreated as the two adversaries backed away from a full-scale conflict. Crude is now trading back below $60 and is headed for about a 6% loss for the week.
“Prices are still sliding because of the easing in tensions in the Middle East,” said Michael Loewen, director of commodity strategy at Scotiabank. “That’s draining the supply risk premium that was injected into the market starting with the killing of the Iranian general.” Data from the U.S. showed the supplies are plentiful, not only in crude but also in products, he added.
U.S. crude inventories increased by 1.16 million barrels last week despite expectations for a decline, and gasoline stockpiles hit a 10-month high, government data showed on Jan. 8. Combined, weekly crude and product inventories swelled nearly 15 million barrels.
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