DTN Oil

NEW YORK (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Friday's session higher, although all petroleum contracts registered their third consecutive weekly losses as market sentiment turned increasingly bearish following softer-than-expected macroeconomic data out of major global economies while central banks doubled down on hawkish messaging of additional rate hikes to fight off persistent inflation.

U.S. consumer sentiment fell for a fourth straight month in November, according to a survey released by the University of Michigan Friday morning, as households' expectations for inflation rose again for the short to medium term.

"Overall, lower-income consumers and younger consumers exhibited the strongest declines in sentiment. In contrast, sentiment of the top tercile of stockholders improved 10%, reflecting the recent strengthening in equity markets," said Surveys of Consumers Director Joanne Hsu.

Officials at the U.S. Federal Reserve pay close attention to consumers' expectations about inflation as these trends could determine expectations for a salary raise. During an Internal Monetary Fund-organized conference in Washington, D.C., Federal Reserve Chairman Jerome Powell noted that the U.S. central bank would "not hesitate to execute another rate hike" should inflation fail to ease towards its 2% target in a timely manner.

Powell further stressed financial conditions might not be restrictive enough for the central bank to be convinced consumer prices are indeed easing towards a set target. His comments triggered another rally in the U.S. dollar index earlier this week while further souring sentiment in the oil market. The risk of additional rate hikes from the central bank against an already slowing economy undercuts the outlook for fuel demand heading into the winter months.

In China, high-frequency demand figures revealed flight throughput returned to its Spring 2023 levels after upward momentum over the summer months, while overall traffic volumes softened in October. Additionally, manufacturers in China and other Asian economies all reported worsening of business conditions at the start of the fourth quarter, undoing some of the gradual improvement between June and September.

A combination of a softer growth outlook and unwinding of geopolitical risk-premium tied to the Oct. 7 attack by Hamas on Israeli civilians pushed both West Texas Intermediate and Brent futures to their lowest levels since July earlier this week.

NYMEX December WTI futures added $1.43 to settle at $77.17 bbl, with the January contract finishing the week at $77.15 bbl. ICE January Brent climbed above $81 bbl to $81.43, up $1.42 on the session, with next-month February contract settling at $81.13 bbl.

NYMEX December RBOB futures moved up $0.0287 to $2.1895 gallon, reversing higher from Wednesday's $2.1220 gallon 11-month low on the spot continuous chart. RBOB basis in the underlying New York Harbor spot physical market, which strengthened to a 500-point premium to the December contract, lent upside price support. The New York Harbor market has tightened amid an extended turnaround at Monroe Energy LLC 195,000 bpd Trainer refinery in Pennsylvania, which began on Sept. 11. The turnaround is expected to be completed on Nov. 16.

NYMEX December ULSD futures advanced $0.0240 to $2.7431 after setting at $2.7191 gallon on Thursday -- the lowest settlement on the spot continuous chart since July 20. A selloff in ULSD futures accelerated this week after the American Petroleum Institute reported an unexpected 1 million bbl build in U.S. distillate fuel inventory during the week-ended Nov. 3 Tuesday afternoon, with the EIA postponing their statistical report by a week due to system upgrades. Despite ending Friday's session higher, December ULSD futures settled below the 200-day moving average, now at $2.7947 gallon, for three consecutive sessions -- a bearish development

Liubov Georges can be reached at Liubov.georges@dtn.com