Oil set to end volatile week below $100 on slowdown concerns

Oil is poised to end the week below $100 a barrel for the first time since early April after another volatile period of trading marked by escalating concerns over an economic slowdown.

West Texas Intermediate tumbled below $91 a barrel on Thursday, erasing all of the gains seen in the wake of the Ukrainian crisis in late February, before clawing back some of those losses. Futures edged higher on Friday but the US benchmark is still down around 8 per cent for the week.

President Joe Biden is scheduled to touch down in Saudi Arabia on Friday as part of a Middle East tour. The visit follows a report that showed US inflation surged to a four-decade high last month, much of it driven by energy costs.

Concerns about an economic slowdown have overshadowed a squeeze of the physical oil market, in part due to upended trade flows from Russia. Goldman Sachs Group said the market is “screaming” tightness and that this week’s selloff has been driven by low liquidity and technical factors.

A stronger dollar and rising Covid-19 cases across China have also put pressure on oil this week. Shanghai’s flareup appears to be easing, but other regions are being locked down and facing restrictions to curb the spread of the virus.