Oil futures declined on Friday, with global energy demand concerns pushing prices for the commodity down toward its lowest settlement in at least a week.
“Crude prices have continued to retreat from their four-month highs [Friday] due to lingering concerns of weakening future energy demand,” Balint Balazs, global commodity analyst at Schneider Electric, wrote in a daily note.
Data Friday showed the IHS Markit flash purchasing managers index for manufacturing in March fell to a 21-month low, with the U.S. flash manufacturing PMI at 52.5 in March from 53 a month earlier. The purchasing-managers-index readings for the eurozone also came in much weaker than expected. The data underlined worries over global growth prospects—and energy demand.
West Texas Intermediate crude for May delivery CLK9, -1.92% on the New York Mercantile Exchange fell 89 cents, or 1.5%, at $59.09 a barrel. The contract was clinging to a 0.5% weekly gain.
May Brent crude LCOK9, -1.59% lost 98 cents, or 1.4%, to $66.88 a barrel on ICE Futures Group. It was at risk of a 0.4% weekly decline.
Prices for the U.S. and global crude benchmarks had climbed to the best levels of 2019 earlier this week, buoyed by expectations for tighter supplies on the back of output cuts by the Organization of the Petroleum Exporting Countries and its allies and ongoing U.S. sanctions on Venezuela and Iran.
The rally early in the week also followed data showing an unexpectedly large drop in U.S. supply and a shift away from interest-rate tightening at the Federal Reserve, which lifted stocks and could bode well for oil demand.
“Thanks to the OPEC+ production cuts, involuntary production outages in Venezuela and Iran, and the sharp decline in U.S. oil stocks, oil prices are facing their third consecutive weekly gain,” said Daniel Briesemann and the commodities strategy group at Commerzbank. “Though both oil prices are falling slightly today, they are still close to the four-month highs they achieved this week.”
The Energy Information Administration on Wednesday said U.S. crude inventories fell by an unexpected 9.6 million barrels last week.
“It is also possible that less crude oil and oil products will reach the world market from Russia in the near future,” Briesemann said. “The Russian government decided [Thursday] that companies will have to sell a certain amount of gasoline and diesel on the domestic market in order to obtain an export permit. This is intended to prevent domestic fuel prices rising too sharply as a result of higher crude oil prices.”
Back on Nymex, April gasoline RBJ9, -0.86% fell 0.7% to $1.906 a gallon, with prices looking at a weekly rise of 2.6%. April heating oil HOJ9, -1.66% shed 1.6% to $1.956 a gallon, trading 0.6% lower on the week.
Read: Gasoline prices ‘really starting to surge,’ could near $3 a gallon by spring: analyst
April natural gas NGJ19, -1.67% traded at $2.777 per million British thermal units, down 1.6% in Friday dealings and 0.6% lower for the week.
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