Venerdì, 06 Ottobre 2023 10:39

Oil Suffers Biggest Weekly Loss Since March as Volatility Spikes

(Bloomberg) -- Oil headed for its biggest weekly drop since March as worries about the global economy clouded the demand outlook, with commodities rocked by gains in the US dollar and a surge in bond yields.

West Texas Intermediate held above $82 a barrel after closing Thursday at the lowest level since late August. The US crude benchmark has tumbled more than 9% this week, with deep losses Wednesday and Thursday. The combination of technical traders and a spiraling options market is a key factor in the drop.

Oil lost ground this week following a poor print for US gasoline consumption, coupled with a rise in inventories of the motor fuel. That’s ignited a debate about whether an earlier run-up in prices was destroying product demand, though banks such as Goldman Sachs Group Inc. and Barclays Plc say the concerns are overdone.

“The recent correction in oil prices has been too rapid and was largely unwarranted in our view,” Barclays analyst Amarpreet Singh said. “The narrative of price-driven demand destruction does not stand in the face of the fact that very little of the recent run-up in oil prices has been passed on to the consumers.”

Concerns about global growth are roiling commodities more broadly, with copper on track for a hefty weekly drop and trading near the lowest level this year. Gold also is on track for a second straight week of losses.

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