Oil headed for a third straight week of losses on Friday as a forecast downgrade in US economic growth spread fear over record oil inventories and both weak housing and manufacturing data.
A positive US jobs report, which helped boost US crude by almost 1.2 percent on Thursday was eclipsed by Friday’s negative sentiment.
The USA is the world’s top oil user but weakness in the consumer sector has slowed energy demand growth in the nation’s total petroleum inventories to their highest levels since weekly records began in 1990.
October’s US crude for delivery fell 17 cents to $73.19 a barrel after touching an intraday trough of $70.76 on Wednesday, which was the lowest price since early June.
Since then, prices have slid approximately $10 from a peak nearing $83 on 4 August.
“The fundamental picture is very negative,” said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.
“If you get supportive data in terms of GDP and stimulus, prices could go to the top of the trading range”, he added, “but if it comes lower than expected, the environment is so negative that we could see a break of $70″.
The US government is expected to revise second-quarter gross domestic product growth on Friday to an annual pace of 1.4 percent down from 2.4 percent.
US Federal Reserve Chairman Ben Bernanke is expected to discuss the economy’s uncertain prospects in a speech to fellow central bankers on Friday, but is not expected to reveal whether more cash will be pumped into the economy to keep the recovery going.
