Oil headed for its first weekly loss since June as concerns over economic weakness in China and potentially even tighter monetary policy in the US combined to overshadow signs of a solid physical market.
West Texas Intermediate traded above $80 a barrel, set for a drop of about 3% this week as a stream of poor economic data from China has weighed on risk assets including oil. That has eclipsed signs of a tighter crude market, with US stockpiles declining to the lowest level since January.
In the US, Federal Reserve policymakers have signaled they may not be done hiking rates to tame inflation, helping to lift Treasury yields and aiding the dollar. The US currency is on course for a fifth weekly gain, the longest run in more than a year, which dulls the allure of commodities for overseas buyers.
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