U.S. crude oil on Friday was on pace for its first weekly loss in three weeks, as the prospect of growing oil supplies from Saudi Arabia overshadowed China’s efforts to stimulate its economy.
The U.S. benchmark West Texas Intermediate is down nearly 6% this week, while global benchmark Brent has pulled back nearly 4%. Prices have fallen even as conflict in the Middle East escalates, with Israel and Hezbollah trading blows in Lebanon.
“It is amazing to see that … war doesn’t affect the price, and that’s because there’s been no disruption,” Dan Yergin, vice chairman of S&P Global, told CNBC’s “Squawk Box” Friday.
“There’s still over 5 million barrels a day of shut in capacity in the Middle East,” Yergin said.
Here are Friday’s energy prices:
- West Texas Intermediate November contract: $67.51 per barrel, down 16 cents, or 0.24%. Year to date, U.S. crude oil is down more than 5%.
- Brent November contract: $71.37 per barrel, off 23 cents, or 0.32%. Year to date, the global benchmark is down about 7%.
- RBOB Gasoline October contract: $1.9596 per gallon, little changed. Year to date, gasoline is down about 7%.
- Natural Gas November contract: $2.774 per thousand cubic feet, up 0.76%. Year to date, gas is up about 10%.
Oil sold off Thursday on a report that Saudi Arabia is committed to increasing production later this year, even if it results in lower prices for a pro-longed period.
OPEC+ recently postponed planned output hikes from October to December, but analysts have speculated that the group might delay the hikes again because oil prices are so low.
The oil selloff erased gains from earlier in the week after China unveiled a new round of economic stimulus measures. Soft demand in China has been weighing on the oil market for months.
“The thing that’s dominated the market is the weakness in China. Half the growth in world oil demand over a number of years has simply been in China, and it hasn’t been happening,” Yergin said.
“The big question is, stimulus, will you see a recovery in China,” he said. “That’s what the market is struggling with.”
