WASHINGTON (DTN) -- After a selloff opening the truncated week, New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange (which did trade Monday) ended little changed Friday, consolidating above 3-month lows, with West Texas Intermediate and Brent futures registering better than 6% weekly losses as traders cut long positions on expectations for sluggish global oil demand in the fourth quarter.
Both WTI and Brent posted the second consecutive weekly decline through Friday as oil demand again comes under scrutiny amid rising cases of coronavirus in major economies. India, Brazil and the United States have made limited progress in combating the virus over the summer months, suggesting a more difficult struggle ahead in the fall shoulder period.
U.S. gasoline consumption fell to the lowest point this summer at 8.39 million barrels per day (bpd) during the week leading up to the Labor Day holiday weekend when driving demand typically surges amid family vacations. And, distillate demand continued lower in the most recent week, sliding 205,000 bpd or 5.2% to 3.713 million bpd. Consumption of middle distillates, primarily diesel fuel, correlates closely with economic activity. Overall, U.S. petroleum products supplied to the market were down 11% last week compared to the prior 5-year average.
This week's weak price performance comes ahead of a Sept. 17 meeting by OPEC+ when production quotas will be reviewed, with sluggish oil demand coinciding with increased output by OPEC+ in August. Saudi Arabia is expected to pressure noncompliant members of the producer group to meet their quotas.
October WTI futures settled flat at $37.33 barrel (bbl), moving off Tuesday's $36.13 3-month spot low $36.13. The Brent November contract settled below $40 bbl for a second time this week at $39.83 bbl, down 23 cents, holding above this week's 3-month low on the spot continuous chart at $39.31. NYMEX ULSD October futures edged higher 0.72 cents to settle at $1.0896 gallon and the front-month RBOB contract settled down 0.28 cents at $1.0949 gallon.
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