HOUSTON, Oct. 19 (Xinhua) -- Oil prices fell for the week ending Oct. 18 as bearish sentiment prevailed in the oil market, despite bullish news on Middle East, with the price of West Texas Intermediate (WTI) for November delivery down 1.69 percent and Brent crude oil for December delivery down 1.80 percent.
WTI closed the week at 53.78 dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 59.42 dollars a barrel on the London ICE Futures Exchange.
WTI and Brent crude prices have increased 18.43 percent and 10.45 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.
On Monday and Tuesday, WTI and Brent crude lost 3.46 percent and 2.93 percent, respectively, as the market continued to be concerned about weak global demand.
Analysts said investors were worried that trade uncertainties among world's major economies will lead to global economic downturn and dampen oil demand. The International Energy Agency (IEA) cut its headline oil demand growth number by 0.1 million barrels per day for both 2019 and 2020 in its latest monthly oil market report.
On Wednesday and Thursday, WTI and Brent crude gained 2.12 percent and 1.99 percent, respectively, as investors' sentiment was lifted by such signs as supply cut by the Organization of the Petroleum Exporting Countries (OPEC) and other major oil exporters, weaker U.S. dollar and Brexit progress, despite the more than expected growth of U.S. crude inventories.
U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 9.281 million barrels in the week ending Oct. 11, more than the market expected growth of 2.878 million barrels, implying weaker demand and bearish for crude price.
At 434.9 million barrels, U.S. crude oil inventories were about 2 percent above the five-year average for this time of year.
On Friday, oil prices declined as market participants remained concerned about weakening demand.
Weaker economic data from some of the world's major economies renewed investors' concerns that slower global growth would dampen crude demand and further pressurize oil prices.
In addition, investors were worried that trade uncertainties between the United States and its major trading partners will add to global economic downturn, said analysts.
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.
The International Monetary Fund (IMF) downgraded growth of the global economy. In the October World Economic Outlook, issued on Tuesday, IMF forecast a 3 percent growth in 2019, the slowest pace since the global financial crisis. It also estimated that the U.S.-China trade tensions will cumulatively reduce the level of global GDP by 0.8 percent by 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, although the U.S. Dollar Index finished the week ending Oct. 18 with its worst weekly decline since mid-June 2019 due to heavy bearish pressure.
For the upcoming week, the market will watch closely over the Middle East situation and the development of U.S.-China trade talks.
U.S. President Donald Trump said on Friday afternoon that America's actions in Syria should have been made years ago under the Obama administration. He also claimed that "we've taken control of the oil in the Middle East."
In the meantime, the prospect of supply cut by OPEC will help stabilize the crude oil prices. Analysts believe when OPEC and its allies meet in December, they may have no other choice but to deepen the production cuts to support oil prices.