Oil extends 10% weekly drop as demand concerns spur caution

Oil fell as the week’s trading kicked off, extending the biggest weekly decline since April, amid persistent concern about weakening demand.

West Texas Intermediate dropped below $89 a barrel in early Asian trading after slumping by almost 10 per cent last week on soft US gasoline consumption data.

Investors have backed away from commodities in recent months as slowing growth feeds concern that energy usage will drop.

Crude has had a roller-coaster ride in 2022, soaring in the opening months of the year following the crisis in Ukraine, then sinking from June onward as slowdown concerns gathered pace.

Elevated inflation has prompted central banks including the Federal Reserve to jack up interest rates, with investors wagering that more hikes remain in store this half.

Oil’s drop early on August 7, came despite data released at the weekend that showed China’s imports of crude rose in July from the lowest in four years as travel and transportation activity improved after Covid-19 curbs eased. Still, the country’s year-to-date total remains about 4 per cent lower.