Oil prices gain after choppy week
US benchmark West Texas Intermediate for delivery in November added 79 cents to $45.70 a barrel, helped partly by an improved view of the US economy after second quarter GDP growth was revised higher.
Brent North Sea crude for November delivery gained 43 cents to finish at $48.60 a barrel in London deals.
Prices bounced up and down over the week but ended around $1.00 higher than the previous high for each contract.
But both the demand and supply pictures remain unclear. There are suggestions that US output could begin to decline on low prices, but demand strength is also a concern.
Weaker growth in energy-hungry China this year is expected to cause a slowdown in the rest of Asia, the Asian Development Bank said Tuesday, as it became the latest major body to revise down its forecasts for the world’s number two economy.
At the same time, Federal Reserve Chair Janet Yellen expressed confidence in the US economy Thursday, saying she still expects the Fed to raise interest rates by the end of the year. The Fed held off from an increase last week, citing worries about how China’s slowdown would affect the rest of the world.
“We seem to stabilize over expectations we’ll see production levels here in America continue to drop, and this provides an outlet for fears of an excess supply hanging on the market,” said Gene McGillian of Tradition Energy.
“When you step back, the bigger picture is the decline in North American production levels, which will probably just meet the increase in Iran.”
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