Oil prices experienced their second straight weekly decline as signals of additional crude supplies and a deteriorating global demand outlook overshadowed recent trading sessions. The market has shifted from a narrative of tight supplies, which had driven crude's rally since June, due to the potential easing of US sanctions on Iran and Venezuela.
The prospect of eased sanctions suggests that more oil could enter the global market, thereby increasing supply. This development comes alongside concerns about faltering economic growth in China and abysmal economic data from Europe, both of which have dimmed the outlook for overall oil demand.
In the physical market, Marathon Petroleum Corp. is reportedly shutting down the third-largest oil refinery. This closure could influence regional supply dynamics, but the broader market sentiment remains focused on the interplay of potential new supplies from sanctioned countries and weakened global consumption.
