HOUSTON, Oct. 26 (Xinhua) -- Oil prices gained for the week ending Oct. 25, as concerns over tight supply outweighed weaker demand, with the price of West Texas Intermediate (WTI) for December delivery up 5.36 percent and Brent crude oil for December delivery up 4.38 percent.
WTI closed the week at 56.66 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 62.02 dollars a barrel on the London ICE Futures Exchange.
WTI and Brent crude prices have increased 24.78 percent and 15.28 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, crude prices continued to move under pressure as market remained concerned about weakening demand. WTI and Brent crude extended falls after a weekly loss, erasing 0.47 percent and 0.46 dollar, respectively.
The prices increased for the four following consecutive days, underpinned by the news that the world's major oil producers will consider deeper production cuts amid demand concerns and U.S. Energy Information Administration (EIA) reported a surprise drawdown in crude oil inventories.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies are expected to implement bigger production cuts when they next meet in December in a bid to counter the weaker growth in demand.
In July, OPEC and Russia, together with other non-OPEC members agreed to extend a 1.2 million barrel a day production cut for nine months, a move designed to keep oil prices from falling.
Meanwhile, according to EIA's Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 1.699 million barrels during the week ending Oct. 18. While analysts had expected an increase of 2.232 million barrels.
The surprise drop in U.S. crude stocks and the prospect of further output cut by major oil producers, as well as the sharp fall of U.S. active oil rigs, offset fears on weaker demand. From Tuesday to Friday, WTI and Brent crude grew 6.28 percent and 5.19 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.
The U.S. Dollar Index traded at five-day highs on Friday and finished the week with upward momentum. Analysts believed the next resistances on the way up will be near 97.90 and 98.20 price levels.
For the upcoming week, analysts believe the fragile economic outlook will continue to weigh on fuel demand. In the meantime, the hopes of a bilateral deal on U.S.-China trade may continue to underpin a bullish tone on oil prices, and analysts said the market will watch closely over the development of U.S.-China trade talks.
