HOUSTON, Sept. 14 (Xinhua) -- Oil prices posted the biggest weekly drop within almost two months for the week ending Sept. 13, but eventually avoided further slump thanks to the optimistic sentiment on trade frictions between the United States and China, with the price of West Texas Intermediate (WTI) for October delivery down 2.95 percent and Brent crude oil for November delivery down 2.14 percent.
WTI closed the week at 54.85 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 60.22 dollars a barrel on the London ICE Futures Exchange.
WTI and Brent crude prices have increased 20.79 percent and 11.93 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 and the four consecutive days' loss outpaced the gains on Monday, mainly due to the concerns with oversupply of crude oil. Meanwhile, some gestures of goodwill by Washington and Beijing boosted market sentiment.
Oil prices rose on Monday as investors' lingering worries about oversupply were temporarily eased, as the new Saudi energy minister said he would stick with the country's current policy of limiting crude output to support prices.
WTI increased 1.33 dollars to settle at 57.85 dollars a barrel, while Brent crude rose 1.05 dollars to close at 62.59 dollars a barrel.
From Tuesday to Friday, the oil prices kept falling for consecutive four days despite a large draw of U.S. crude oil inventories and dropping U.S. rig count. WTI lost 3.00 dollars, or 5.19 percent, and Brent crude lost 2.37 dollars, or 3.79 percent, respectively.
Oil prices started to decline on Tuesday after U.S. President Donald Trump said U.S. National Security Advisor John Bolton resigned upon his request. Bolton has been known as a hawkish figure in the Trump administration who advocated tough foreign policies, especially in regard to Iran and Afghanistan.
Analysts said the news weighed on the oil market as Bolton's departure would potentially ease tensions between the United States and Iran, which would put more oil on the market.
U.S. crude oil inventories decreased by 6.912 million barrels during the week ending Sept. 6, more than market expected draw of 2.686 million barrels. At 416.1 million barrels, U.S. crude oil inventories were about 2 percent below the five-year average for this time of year.
In the meantime, U.S. energy services firm Baker Hughes reported on Friday that in the week ending Sept. 13, the number of U.S. active oil rigs dropped by five to 733, or 134 less than the 867 of the same period last year.
The data of U.S. crude oil inventories and active oil rig count, along with positive news on trade issues between the United States and China, provided support to oil prices.
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.
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.
Furthermore, according to the International Energy Agency (IEA), the relentless stock builds since early 2018 have halted, but "this is temporary." It forecast that the OPEC+ producers will once again see surging non-OPEC oil production with the implied market balance returning to a significant surplus and placing pressure on prices.
In its latest "Oil Market Report" released on Wednesday, IEA asserted that "the challenge of market management remains a daunting one well into 2020."
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 Sept. 13, the U.S. Dollar Index finished lower, but still met support in the 98.00 area.
Oil is mostly traded in dollar all over the world and a stronger dollar pressures the oil demand.
In the coming weeks, the market would watch closely the development of trade disputes between China and the United States. Both sides recently have showed signs of rapprochement in their trade disputes, and another round of trade talks is expected to be held in October.