BD: Oil headed for first weekly loss in five weeks
LONDON — Brent crude oil fell below $118 a barrel on Friday and was heading for its first weekly loss in five after disappointing eurozone growth data revived concern about the outlook for energy demand.
Global growth prospects were further clouded by expected divisions at a meeting in Moscow of finance officials from the Group of 20 nations, which account for 90% of the world’s economy, over economic policy and its impact on currencies.
Economists are worried that competitive devaluations could lead to currency wars, impoverishing nations worldwide.
The fall in oil was modest, though, and traders and analysts said hope for a faster economic expansion later in the year and concern about the security of oil supplies from the Middle East were underpinning prices.
Brent futures were down 40c at $117.60 a barrel by 12pm GMT, heading for its first weekly loss since the first half of January. US crude shed 40c to $96.91 a barrel.
"The eurozone data are still weighing on financial markets, including oil, but the figures are backward-looking. The most recent forward-looking indicators point to an improvement," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
"The risks are mostly to the upside for oil: we have improving growth prospects with higher oil demand globally and supply is not rising as much."
Iran
The eurozone slipped deeper into recession last quarter, with the steepest quarter-on-quarter drop since 2009, but other figures suggested the bloc might be starting to claw its way out of a slump and could see growth again by midyear.
Concern about Iran’s nuclear programme as well as other Middle East tension kept a floor under oil prices.
Talks between Iran and the United Nations appear to have failed as its inspectors returned from talks in Tehran with no deal on reviving a nuclear investigation, no date for a new meeting and no signal of hope for big power diplomacy aimed at averting a war.
Concern that the conflict could curb oil supply had eased slightly after the Middle Eastern nation appeared to be taking steps to slow the growth of stockpiles of nuclear materials that could be used to make a bomb.
Syria’s civil unrest continued to worsen, as did sabre-rattling by Israel, adding to concerns about disruption of Middle Eastern supplies.
US prices also found support from concerns that gasoline supplies may be reduced by refinery maintenance shutdowns, which pushed prices of the product as well as the oil complex higher.
