Oil Cements Weekly Loss as Macro Gales Whip Crude To and Fro

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Oil posted a weekly loss with macroeconomic headwinds dominating the market as traders await clearer signals on Chinese demand trends.

Crude declined $3 this week despite Friday’s gains amid fears that the Federal Reserve will pivot to more aggressive interest-rate hikes, compounding pressure from tempered economic projections from China and a slower-than-expected recovery in international travel. Bulls looking for a supply-driven bump have been disappointed by the resilience of Russian crude output.

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“Risk appetite is dominating as crude traders shy away from substantially increasing their positioning with prices locked into a tight range,” said Daniel Ghali, a commodity strategist at TD Securities.

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The market has had a bumpy year so far, tugged back and forth by the opposing drivers of US slowdown concerns and China’s rebound. Most major banks expect demand to surge in the second half of the year, with Chinese international travelers playing a key role. The possibility of such a rebound from the world’s biggest consumer of the commodity appears to be increasing as a key proxy for Asian oil demand is rallying.

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