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Oil on track for longest weekly losing streak in 29 years

US oil prices headed for their eighth consecutive week of falls on Friday, the longest losing streak since 1986, after a sharp drop in Chinese manufacturing increased worries over the health of the world’s biggest energy consumer.

Activity in China’s factory sector shrank at its fastest pace in almost 6-1/2 years in August as domestic and export demand dwindled, adding to worries about lower consumption of crude in the second-biggest oil user.

Asian stocks followed Wall Street lower as fears took hold of a China-led slowdown in global growth.

Both global oil benchmarks are near 6-1/2-year lows, with US crude heading for its longest weekly losing streak in 29 years.

In late 1985, oil prices slumped to USD 10 from around USD 30 over five months as OPEC raised output to regain market share following an increase in non-OPEC production.

US crude for October delivery was 1.21 percent lower at USD 40.82 a barrel by 8:47 a.m. ET. On Thursday, the September US crude contract saw its lowest intraday trade since March 2009 at USD 40.21 a barrel before it expired at the market close.

Brent oil was on track for its seventh weekly decline in eight, down 1.82 percent at USD 45.77 a barrel, after settling 54 cents lower on Thursday.

“Weighing on prices is the continued ample supply with crude oil builds in the US and OPEC pumping at record levels,” said Michael Poulsen at Global Risk Management in Middelfart, Denmark. “Fear of slowing growth in China is increasing.”

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The dollar slipped on receding expectations of a US interest rate increase in September, providing some support for oil.

US crude inventories continued to rise last week, as imports rose and shale production fell more slowly than anticipated, despite dropping prices.

“The only silver lining we are seeing coming from the United States is that refining rates remain high and that crude production continues to fall,” Daniel Ang at Singapore-based Philip Futures said.

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