Oil Trading Follows Conflicting Sentiment On Demand, Prices Decline

However, the commodity achieves its first weekly gain in two months: File Image/Pixabay 

Conflicting signs regarding oil demand translated into a roller coaster trading session for crude on Friday, with two key benchmarks ultimately incurring slight losses.

Brent settled down 6 cents at $76.55 per barrel, and West Texas Intermediate settled down 15 cents at $71.43.

The conflicts were spearheaded by a New York Federal Reserve Bank manufacturing survey showing that new orders declined for a third straight month in the U.S.

This caused New York fed president John Williams to remark that it's too early to think about cutting rates: a direct contradiction to earlier recent sentiments from the fed that the central bank is now focused on when to cut borrowing costs in the face of inflation continuing to drop.

Contributing to Friday's ultimately rudderless trading session was lingering concern over the International Energy Agency earlier reducing its estimates for global oil demand growth this quarter by almost 400,000 barrels per day (bpd), prompted by reports of weakening economic activity; the IEA believes growth will be half than originally thought in 2024, to about 1.1 million bpd.

Still, Michael Kern, analyst at Safehaven.com, regarded Friday as contributing to a long overdue bullish week for oil markets, noting that prices were on course for their first weekly increase in two months.

He wrote, "Despite continuous attacks on tankers in the Red Sea, it was the United States that provided most of the bullish sentiment: first, the Federal Reserve's pledge to start cutting interest rates next year buoyed the markets in general before a larger-than-expected U.S. inventory draw pushed oil even higher."

Kern was referring to the Energy Information Administration reporting a 4.3 million barrel drawdown of crude during the week ended Dec. 8.

In other oil news on Friday, Venezuela and Guyana agreed not to use force or threats in a long-standing dispute over resource-rich border territory of Essequibo, which the former recently revived its claim to following a 2015 discovery of oil off the coast.

Venezuela president Nicolas Maduro and Guyana president Mohamed Irfaan Ali reaffirmed their commitment to "good neighborliness" and "peaceful coexistence."