Oil Sinks To An 8% Weekly Low As China, Israel, Continue To Exert Analytical Influence

Also, oil explorers' spending growth has shrunk of late: File Image/Pixabay

Increasing concerns over China's economy and easing worries about Middle East hostilities – the two key drivers forcing oil prices downwards this week – were responsible on Friday for another daily drop, as well as a weekly plummet of about 7 percent.

Brent settled down $1.39 to $73.06 per barrel while West Texas Intermediate settled down $1.45 at $69.22 per barrel; for the week, Brent shed over 7 percent, while WTI lost around 8 percent, their biggest weekly declines since Sept. 2.

The latest about China is that its steel mills produced 77.07 million tons last month, the lowest total this year, contributing to a 3.6 percent decrease in the first nine months of 2024, according to data released Friday.

Steelmaking and oil processing were said to be China's worst performing industrial sectors this year, the latter due to the electrification of the country's car fleet; on the flip side, its coal output for September reached the second-highest level on record.

As for the Middle East, Israel announcing its forces had killed Yahya Sinwar, the leader of Hamas, supposedly removed the "chief obstacle" to a ceasefire agreement between the two parties, according to U.S. state department spokesman Matthew Miller.

He said, "That obstacle has obviously been removed; can't predict that that means whoever replaces [Sinwar] will agree to a ceasefire, but it does remove what has been in recent months the chief obstacle to getting one."

Yet more news on Friday that could be perceived to be bearish was provided by SLB, the world's biggest oilfield services provider, which warned that oil explorers' spending growth has shrunk in recent months amid lower crude prices.

However, SLB chief executive officer Olivier Le Peuch told investors that "Although some customers have adopted a more cautious approach to their near-term capital expenditures and discretionary spending amid lower commodity prices, most projects are progressing as planned.

"Although the rate of upstream spending growth has moderated in the last few months due to the macro environment, we continue to expect a sustained level of upstream investment in the years to come."