- Oil prices reported a third consecutive weekly drop on Friday, with indices reversing gains made in the previous session.
- The weekly drop came after a week of extreme volatility despite predictions for near-normal weather over the upcoming weeks.
- Recently, OPEC had slashed its forecast for global oil demand by 330,000 barrels per day for the fourth quarter.
Crude oil prices decline
Oil prices have surprised greatly in the past and reported a third weekly drop on Friday after a week full of volatility.
On Friday, the fall in oil price wiped out gains from the earlier session on the back of worries that the US Federal Reserve would expedite plans to lift interest rates to gentle inflation. According to Reuters Brent crude and WTI fell by 0.8% to reach US$82.17 per barrel and 1% to reach US$80.79 per barrel, respectively.
RELATED ARTICLE: Why is MANA crypto soaring & is it worth exploring?
Global oil demand Forecast cut by OPEC
The weekly fall marks the third consecutive week of decline for both benchmarks, steered by an improving dollar and the speculation regarding the release of oil from the US Strategic Petroleum Reserve to cool down prices.
Source: © Batareykin | Megapixl.com
According to Reuters, the demand for oil is seen to be favoured by positive signs like the rapid opening of air travel. Moreover, OPEC on Thursday had slashed its forecast for global oil demand by 330,000 barrels per day for the fourth quarter from the forecast made in the previous month as rising energy prices hindered economic recovery from the COVID-19.
Strong demand from China
In the past week, OPEC+, which includes Russia and allies together, agreed to remain committed to the proposal to add 400,000 bpd to the market monthly.
On the other hand, prices for LNG-ASIA rose in the past week after three weeks of fall. The rise came on the back of increased demand from China after a strong decline in temperature while market participants watched Russian supply into Europe.
Source: © Gumpapa | Megapixl.com
As per industry sources, the average LNG prices for December delivery into Northeast Asia escalated to US$31.50 per metric million British thermal units or around 6.8% from the earlier week.
RELATED ARTICLE: How to keep your pockets full during market downturns
The decline in the US natural gas futures by 7% marked a nine-week low on the back of a continued rise in the output and with the anticipations for utilities to keep stockpiling gas into mid-November. The price drop came amid high volatility in the market during the week, notwithstanding predictions for cooler, near-normal weather over an upcoming couple of weeks.