BUSINESS

Oil finishes week down 2% on concerns about global demand, Fed's next move

05/24/2013 04:33 EDT | Updated 07/24/2013 05:12 EDT
NEW YORK, N.Y. - The price of oil fell two per cent this week as oil traders worried about global demand and shared the stock market's concerns about possible changes to the U.S. Federal Reserve's economic stimulus program.

The loss Friday was just 10 cents, to US$94.15 a barrel. But four straight losses resulted in a weekly decline of $1.87 a barrel for benchmark West Texas Intermediate crude.

The global economic picture was clouded by weak manufacturing data from China. That raised questions about the strength of oil demand in the world's No. 2 economy. In the U.S., a report from the Energy Department showed the country is well-supplied with oil, while gasoline demand remains below year-ago levels.

One question overhanging the market is what the Federal Reserve's next moves will be with its monetary policy. Recent comments from Fed policy-makers, including chairman Ben Bernanke, raised concerns that the Fed will scale back effort to support the economy sooner than traders had expected.

The uncertainty led U.S. stock markets to their first weekly loss in a month. Oil tracked stocks for most of the week, as oil traders looked to their equities counterparts for clues on how to react to the Fed.

Brent crude, a benchmark for many international oil varieties, rose 20 cents to US$102.64 a barrel Friday on the ICE Futures exchange in London.

In other energy futures trading on the New York Mercantile Exchange, wholesale gasoline rose one cent to US$2.84 a U.S. gallon (3.79 litres), heating oil was flat at US$2.86 a gallon and natural gas fell two cents to $4.24 per 1,000 cubic feet.

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