HOUSTON, Aug. 31 (Xinhua) -- Oil prices increased for the week ending Aug. 30 amid growing concerns about U.S.-China trade tensions and a string of bullish news, with the price of West Texas Intermediate (WTI) for October delivery up 1.72 percent and Brent crude oil for October delivery up 1.84 percent.
WTI closed the week at 55.1 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 60.43 dollars a barrel on the London ICE Futures Exchange, swinging around the 60-dollar-level during the week.
WTI and Brent crude prices have increased 21.34 percent and 12.32 percent, respectively, so far this year, falling from their peak levels in April when the growth of WTI hit over 40 percent, and Brent crude over 30 percent.
During the week, WTI and Brent crude moved in the same directions. Oil prices continued to be capped by concerns over the slowdown of global economic growth, but a huge draw in U.S. oil inventories, along with some bullish news such as a hurricane approaching Florida, a plunge of U.S. active drilling rigs, as well as somewhat softened U.S. vs China trade issue rhetoric and Russia's oil output cuts in August, provided floor for the prices.
Oil prices declined on Monday after news came that a France-proposed meeting between top leaders of the United States and Iran might be possible. WTI decreased 0.53 dollar to settle at 53.64 dollars a barrel, while Brent crude lost 0.64 dollar to close at 58.7 dollars a barrel.
Oil prices increased for three consecutive days on Tuesday, Wednesday and Thursday as investors' long-time oversupply concerns were eased by a steep drop in U.S. crude oil inventories.
According to the U.S. Energy Information Administration (EIA) on Wednesday, for the week ending Aug. 23, U.S. commercial crude oil inventories decreased by 10.027 million barrels from the previous week, much more than the market expected fall of 2.112 million barrels, implying greater demand and bullish for crude prices.
WTI added 3.07 dollars a barrel for the three days collectively while Brent crude gained 2.38 dollars a barrel. As of Thursday, WTI settled at 56.71 dollars a barrel while Brent crude closed at 61.08 dollars a barrel. Brent crude price stood at the 60-dollar-level again.
However, oil prices erased gains on Friday, although it looked like they might be heading for their biggest weekly gain since the beginning of July.
Oil prices decreased sharply Friday morning as investors remained concerned about soft demand triggered by global economic slowdown due to trade uncertainties between the United States and China. WTI declined 1.61 dollars to settle at 55.10 dollars a barrel while Brent crude lost 0.65 dollar to close at 60.43 dollars a barrel.
Oil prices have kept gaining momentum since the start of the year due to some geopolitical concerns and OPEC's decision of production cut. The momentum has slowed down, mainly because of the concerns over downturn in demand for crude oil. Furthermore, the ongoing trade tensions between China and the United States reignited concerns over weakening demand for oil.
The slowing global economy continued to be a major headwind for crude oil. The slower economic growth of the world will lead to less demand for oil, which in turn would put downward pressure on oil prices.
Moreover, a rising U.S. dollar in the past months has dragged down the greenback-denominated crude futures, as the U.S. Dollar Index has been keeping uptrend since mid-2018.
During the week ending Aug. 30, the U.S. Dollar Index broke above the 2019 high as the market traded at its highest level since May 2017. It finished the week at near 99 level and analysts forecast the next key resistance would be seen at over 99 level.
Oil is mostly traded in dollar all over the world and a stronger dollar pressures the oil demand.
For the upcoming week, the market would watch closely the development of trade disputes between China and the United States. Oil prices experienced a steep drop in early August, when the U.S.-China trade conflict was threatening to escalate into a currency war.