Oil Points to Biggest Weekly Loss Since Mid-January

“Growth of oil price up to $50 per barrel triggered the growth of hedging activity among oil producers”, he said. “The end of the USA driving season and the prospect of building inventories create downward risk for the oil price and may see further pressure on energy stocks today”. On the same day, Brent North Sea crude touched a similar trough at $45.32 a barrel. “Crude continues just to be weighed down by the significant oversupply situation that we’re seeing around the world”, he said. “Scepticism about possible supply management by producers also helped prices move lower”.

Oilfield services provider Baker Hughes reported Friday that the number of oil rigs operating in the U.S. rose by one to a total of 407 in the latest week.

Oil prices rose as much 11 per cent in August, posting their best monthly return since April, on speculation that the Organisation of the Petroleum Exporting Countries and other producers might agree on curbing output at September 26-28 talks in Algeria.

“We consider that it is the right decision for world markets, that’s the first thing”, Putin told Bloomberg News in an interview released Friday.

Oil had, however, entered a bull market last month – a 20 per cent rise from recent lows – on hopes that Russian Federation and Opec would be able to reach a deal after agreeing to the Algiers gathering.

But doubts have crept in this week after OPEC members Iran and Iraq said they wanted to increase output, followed by Moscow’s comments on Thursday.

The dollar index weakened after the jobs report, making oil and other greenback-denominated commodities more affordable for holders of the euro and other currencies.

Expectations for a hike in borrowing costs have meanwhile swirled since last Friday when Federal Reserve boss Janet Yellen had indicated the United States economy was strong enough for such a move.

However, the dollar faltered on Friday as traders digested a key US August jobs report which came in under forecasts, indicating the economy was not clearly strong enough to support a rate hike.

Still, prices have fallen sharply in the past few days.

The Organization of the Petroleum Exporting Countries, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russian Federation at informal talks in Algeria between September 26 and 28 to discuss a freeze output.

But other market observers remain unconvinced. Front-month October Brent settled at US$48.37/barrel on Aug. 30, up from $42.14/barrel on Aug. 1, and NYMEX WTI settled at $46.35/barrel on Aug. 30, up from $40.84/barrel on Aug. 1.