Oil headed for a second weekly drop as demand concerns returned to the fore, snuffing out gains driven by Saudi Arabia’s unilateral pledge to cut production.
West Texas Intermediate fell below $71 a barrel and is down about 1% this week. Optimism around Riyadh’s move to reduce output by at least 1 million barrels a day was fast replaced by a worsening outlook for consumption. Data released Friday showed China’s inflation remaining close to zero in May, giving fresh evidence that the world’s second largest economy was cooling further.
Reports in Middle Eastern media — including Israel’s Haaretz newspaper — that the US and Iran had made progress on nuclear talks that could lead to more supply from the Islamic Republic helped push crude down 1.7% on Thursday. However, US officials said reports of an interim deal are false.
Read the full story on Bloomberg here.