Oil poised for second weekly decline on gloomy demand outlook

Oil was poised for a weekly loss of almost 8 per cent as concerns over a worsening demand outlook filtered through the crude market.

Demand for winter-delivery crude cargoes has slipped from Singapore to Houston, while the forward curve for both major benchmarks has weakened in a sign that supplies are more ample. West Texas Intermediate edged higher above $82 a barrel on Friday, but futures are down for a second week.

Oil is trading near the lowest level since September as concerns over China’s swelling Covid cases and aggressive monetary tightening from major central banks weigh on the demand outlook. Federal Reserve officials reiterated their resolve to continue raising interest rates to tame rampant inflation.

The market is still facing an uncertain supply outlook heading into winter. The European Union is poised to start curbing Russian seaborne crude flows from early December, followed by sanctions on oil products next year. Global fuel markets have also tightened, most notably for diesel.