HOUSTON, Sept. 28 (Xinhua) -- Oil prices plunged for the week ending Sept. 27 following reports of a partial ceasefire in Yemen as well as the development of crude oil output restoration in Saudi Arabia, with the price of West Texas Intermediate (WTI) for November delivery down 3.75 percent and Brent crude oil for November delivery down 3.69 percent.
WTI closed the week at 55.91 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 61.91 dollars a barrel on the London ICE Futures Exchange.
WTI and Brent crude prices have increased 23.12 percent and 15.07 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 except Thursday when WTI edged down 0.08 U.S. dollar and Brent crude added 0.35 dollar as investors remained worried that oil supply would still surpass the demand even at a time when oil output from Saudi Arabia declined due to drone attacks. WTI and Brent crude closed the day at 56.41 dollars a barrel and 62.74 dollars a barrel, respectively.
Oil prices rose on Monday as investors remained concerned about global supply shortage after the drone attacks on Saudi Arabia's key oil facilities. Analysts said although news reports showed Saudi Arabia had restored around 75 percent of crude production lost in the attacks, the possibility of another attack supported oil prices.
WTI increased 0.55 dollar to settle at 58.64 dollars a barrel, while Brent crude rose 0.49 dollars to close at 64.77 dollars a barrel.
Oil prices started to decline on Tuesday as the market worried that trade tensions between the United States and its major trading partners, including China, would lead to global economic slowdown.
Furthermore, the surprising increase of U.S. crude inventories and positive news on Saudi Arabian restoration of normal oil production level exerted pressures on oil prices.
During the week ending Sept. 20, U.S. commercial crude oil inventories increased by 2.412 million barrels from the previous week, defying market expected draw of 0.249 million barrels, which implied weaker demand and was bearish for crude prices.
Meanwhile, Saudi Arabia announced earlier the week that it had returned to the level of crude oil production, while some reports still suggested it could take months for production to return to normal level.
On Tuesday, WTI and Brent crude plunged 1.35 dollars and 1.67 dollars, and finished the day at 57.29 dollars a barrel and 63.10 dollars a barrel, respectively.
The trend continued in the following days. From Wednesday to Friday, WTI and Brent crude lost 1.38 dollars (2.40 percent) and 1.19 dollars (1.89 percent), respectively.
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, mainly due to the trade disputes between the United States and China, 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 Sept. 27, the U.S. Dollar Index almost hit the 2019 high at 99.38 while challenged the 99.10 support level.
Oil is mostly traded in dollar all over the world and a stronger dollar pressures the oil demand.
The U.S. Energy Information Administration (EIA) forecast on Tuesday that world energy consumption will grow by nearly 50 percent between 2018 and 2050.
According to EIA's International Energy Outlook 2019 Reference case, released on Tuesday, more than half of the increase in global energy consumption occurs in non-OECD (the Organization for Economic Co-operation and Development) Asian countries. China and India have been among the world's fastest-growing economies during much of the past decade, and they remain primary contributors to future growth in world energy demand.
For the upcoming week, the market would watch closely the development of trade talks between China and the United States.
China and the United States are maintaining close contact to pursue positive progress in the 13th round of high-level economic and trade consultations scheduled for October in Washington.
Ministry of Commerce (MOC) spokesperson Gao Feng said on Thursday at a press conference that China's standpoint on the consultations remains unswerving and expressed the hope that both sides will meet each other halfway to seek mutual benefit and win-win results through consultations on the basis of equality and mutual respect.
China and the United States held vice ministerial-level trade talks in Washington between Sept. 19 and 20 and conducted constructive discussions on economic and trade issues of mutual concern. The two sides also carefully discussed the specific arrangement for the 13th round of China-U.S. high-level economic and trade consultations.
Gao said that Chinese firms have recently inquired with U.S. suppliers and purchased U.S. agricultural products. These firms have purchased a considerable amount of soybeans and pork, and the Customs Tariff Commission of the State Council will exclude the purchases from the additional tariffs.