Brent To End The Week Below $99
Brent crude oil held below $99 for a second day on Friday as a global supply glut coupled with a strong dollar weighed on prices.
The commodity traded at $98.48 at 10:20 GMT as investors wondered whether it had hit rock bottom yet.
Weak global demand has been a driving factor in crude prices recently as several large economies around the world struggle to continue growing.
The International Energy Agency released a report on Thursday showing that both China and Europe have had weaker than expected consumption, which has significantly impacted the world’s demand growth. The agency reduced its demand growth estimates to 900,000 barrels per day for 2014 and cut 100,000 barrels per day from its 2015 projection, making it 1.2 million bpd.
A stronger dollar also pressured Brent prices as the upcoming Federal Reserve meeting reignited speculation about a sooner than expected rate hike.
Though the bank has said it will maintain an accommodative policy well into 2015, many believe that if the labor market improves rapidly, the U.S. could see a rate hike even earlier.
A rise in geopolitical tension could have the potential to give oil prices a boost in the coming days though, as the U.S. moves forward with airstrikes in Syria. The growing conflict in the Middle East is already threatening to interrupt production from OPEC producer Iraq, but on Thursday, the conflict also added to growing tension between the U.S. and Russia.
CNBC reported that Russia issued a warning to the U.S., saying that if the country carries out its proposed air strikes in Syria, it could be considered an act of aggression that has not been approved by the UN.
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