Forexpros — Last week saw crude oil futures slump to a two-week low on Friday, as disappointing data on second quarter U.S. gross domestic product and uncertainty over a deal to raise the U.S. debt ceiling underlined concerns over the short-term demand outlook from the world’s largest oil consumer.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD95.97 a barrel by close of trade on Friday, tumbling 3.65% over the week, snapping a string of four consecutive weekly gains.
It earlier fell to USD94.97 a barrel, the lowest price since July 14.
The Commerce Department said on Friday that the U.S. economy grew at an annual rate of 1.3% in the second quarter, below expectations for growth of 1.7%.
Growth in the first three months of the year was revised sharply lower to 0.4% from 1.9%, sparking fears that the U.S. economy could slide into another recession and adding to the already weak outlook for U.S. oil demand.
Meanwhile, with the August 2 deadline just days away, U.S. Republican and Democratic leaders struggled to come up with a compromise that would allow them to raise the USD14.3 trillion debt ceiling.
Ratings agencies Moody’s, Standard & Poor’s and Fitch have said they will cut the U.S.’s top-level credit rating in the event that a failure to raise the debt ceiling results in a default.
Global financial service provider Barclays said in a report Friday that U.S. debt woes and concerns over a possible downgrade were “likely to keep the downward pressure on prices intact” in the short-term.
Crude prices sank nearly 2% on Wednesday after the U.S. Energy Information Administration said in its weekly report that U.S. crude supplies rose by 2.3 million barrels last week, confounding expectations for a 1.5 million barrel drop.
Total motor gasoline inventories increased by 1.0 million barrels, outstripping expectations for a 0.4 million barrel increase.
Energy traders have been closely eyeing gasoline stockpiles in recent weeks to gauge the strength of demand as the U.S. driving season was in its peak gasoline demand period.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery traded at USD116.78 a barrel by close of trade on Friday, declining 1.45% on the week and up USD20.81 on its U.S. counterpart.
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