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Crude oil futures – weekly outlook: August 3 – 7

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Investing.com – Crude oil futures fell sharply on Friday to cap the worst monthly performance since the 2008 global financial crisis as ongoing concerns over a glut in world markets continued to drive down prices.

On the ICE Futures Exchange in London, for September delivery fell to a session low of $51.63 a barrel, a level not seen since January 30, before closing at $52.21, down $1.10, or 2.06%, for the day.

For the week, London-traded Brent futures lost $2.24, or 4.41%, the fifth straight weekly decline. Prices tumbled $11.39, or 18.6%, in July, amid concerns a resumption of Iranian oil exports will add to a global glut.

Iran and six world powers reached a long-awaited nuclear deal in July that would end sanctions on Tehran in exchange for curbs on the country’s disputed nuclear program. Iran reportedly hoards 30 million barrels of oil in its reserves ready for export.

Reports of record high oil exports from Iraq and robust production from Saudi Arabia also contributed to losses.

Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.

Elsewhere, U.S. oil futures fell to the lowest level in more than four months on Friday, after data showed that rigs drilling for oil in the U.S. rose last week, underlining concerns over robust domestic production.

On the New York Mercantile Exchange, for delivery in September hit an intraday low of $46.70 a barrel, a level not seen since March 24, before ending at $47.12, down $1.40, or 2.89%.

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On the week, New York-traded oil futures declined 88 cents, or 2.12%, the seventh consecutive weekly loss. Nymex oil prices plunged $12.22, or 21.24%, in July, the biggest monthly loss since October 2008, as worries over high domestic U.S. oil production weighed.

Industry research group Baker Hughes (NYSE:) said late Friday that the number of rigs drilling for oil in the U.S. increased by five last week to 664, the second straight weekly gain.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $5.09 a barrel by close of trade on Friday, compared to $6.48 in the preceding week.

Concerns over the health of China’s economy, a broadly stronger U.S. dollar and prospects of higher interest rates in the U.S. later this year also weighed.

In the week ahead, investors will be focusing on Friday’s nonfarm payrolls report for July, for fresh indications on the strength of the economy and the timing of a U.S. rate increase.

Market participants will also be awaiting surveys of manufacturing and service sector data from the U.S., the U.K. and China.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, August 3

China is to release revised data on manufacturing activity.

The U.K. is to publish its manufacturing index.

The U.S. is to release data on personal income and expenditure, while the Institute of Supply Management is to release data on manufacturing activity.

Tuesday, August 4

The U.S. is to report on factory orders, while the American Petroleum Institute, an industry group, is to publish its weekly report on oil supplies.

Wednesday, August 5

The U.S. is to release the ADP report on private sector hiring, while the ISM is to release data on service sector activity.

The country will also produce data on the trade balance and on crude oil inventories.

Thursday, August 6

Germany is to release data on factory orders.

The U.S. is to release its weekly government report on initial jobless claims.

Friday, August 7

The U.S. is to round up the week with the closely watched government report on nonfarm payrolls.

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