• Tuesday, March 05, 2024
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BusinessDay

Crude Drops to 52-Week Low after sixth weekly loss

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The price of a barrel of crude oil fell below $44 plumbing multi-month lows and heading for a sixth straight week of losses.

Demand from both China and India has remained solid, but, in China at least, economic growth is stagnant at best and shows no signs of improving. A strong dollar also weighs on crude because oil is priced in dollars. As the dollar strengthens, the price of crude weakens.

Brent settled down 91 cents, or 1.8 percent, at $48.61 a barrel, after touching a more than six-month low of $48.45. US crude closed down 79 cents, or 1.8 percent, at $43.87, after hitting a more than four-month session low of $43.80.

Brent was down 7 percent for the week. It fell 23 percent over the past six weeks while US crude also slid 7 percent on the week and lost 26 percent in the last six weeks.

Oilfield services firm Baker Hughes’ report that the US oil rig count rose by six added to the bearish sentiment for crude as it signalled production could creep up from higher drilling activity. Drillers have added a total of 32 oil rigs over the past three weeks.

Government data showing US gasoline stocks exceeded market estimates by about 300,000 barrels last week has pushed global oil benchmark Brent to six-month lows and US crude to a 4-1/2-month trough.

Analysts said crude futures could be pressured in coming months by seasonal refinery maintenance and stock builds in key oil products such as distillates, which include diesel.

Gasoline hit a 5-1/2-month low as it tumbled 12 percent on the week, its sharpest weekly loss in almost six years. Ultra-low-sulphur diesel fell nearly 3 percent on the week after hitting a six-year bottom.