WASHINGTON (dpa-AFX) - Oil futures settled sharply lower on Friday amid concerns about the outlook for demand from China and recent data showing an increase in U.S. crude inventories.
The dollar's rise this week weighed as well on oil prices. With Federal Reserve Chair Jerome Powell's remarks pouring cold water on rate cut optimism, the dollar has moved up quite sharply this week.
Powell said the U.S. central bank does not need to rush to lower interest rates and can approach decisions carefully, given persistent inflationary pressures.
West Texas Intermediate Crude oil futures for December closed down $1.68 or about 2.45% at $67.02 a barrel. WTI crude futures shed about 5% in the week.
Brent crude futures settled at $71.04 a barrel today, losing $1.52 or about 2.1%.
Demand concerns returned to haunt investors as mixed economic data highlighted China's uneven economic recovery.
Data showed on Friday that China's industrial output expanded at a slower-than-anticipated 5.3% in October, while retail sales jumped an annual 4.8% to surpass expectations boosted by a week-long holiday and the annual Singles' Day shopping festival.
Property investment fell 10.3% year-on-year in January-October and fixed asset investment growth in the first ten months of 2024 came in below expectations, keeping alive calls for Beijing to unveil more stimulus.
Weak oil demand forecasts by both OPEC and the International Energy Agency weighed as well on oil prices.
The International Energy Agency's monthly oil market report released on Thursday predicts a significant discrepancy between global oil demand and supply by 2025.
According to IEA, the world's demand for oil will fall short of supply by more than 1 million barrels per day (bpd) in 2025 even if OPEC+ cuts remain in place.
Earlier this week, OPEC cut its oil demand growth forecasts for 2024 and 2025, citing concerns about the Chinese economy.
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