Oil heads for a weekly loss amid recession fears

Oil prices fell on Friday, after two days of gains, and are on track to post a weekly loss on pressure from the strong dollar and fears of a global economic slowdown.

Brent crude futures were down 97 cents, or 1 percent, at $95.62 a barrel by 0826 GMT. US West Texas Intermediate crude also recorded $89.59 a barrel, down 91 cents, or one percent.

Both benchmark contracts are heading to record weekly losses of nearly three percent.

The dollar’s strength increased the cost of oil to holders of other currencies, while Asian and European stocks declined.

In a sign that the oil supply bottleneck is easing, the gap between the spot price of Brent and the second nearest expiry month for futures contracts is nearly $5 less than at the end of July.

Limiting the decline in prices, US crude stocks fell sharply, with a record amount of five million barrels of oil per day being exported in the last week. Oil companies received requests from European countries seeking to compensate for Russian crude.

Haitham al-Ghais, the new Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), told Reuters that he is optimistic about oil demand next year.

He added before a meeting to be held on the fifth of September that OPEC is keen to ensure that Russia remains within the OPEC + alliance.