(Bloomberg) -- Oil extended its longest losing streak in 10 months, even as investors ramped up bets that the U.S. Federal Reserve will cut rates this month to bolster a flagging economy.
Futures in New York settled lower for the eighth straight session on Thursday, and remained on track for the largest weekly loss since July. Prices had earlier slumped 3.1% as a key measure of service-industry activity in the worlds biggest economy dropped, but reversed some losses as pressure mounted for the Fed to cut interest rates.
Market sentiment shifted to the belief that the Federal Reserve would cut interest rates in October, said Andy Lipow, president of Lipow Oil Associates LLC in Houston. That led to a recovery in oil and equity markets,
The Institute for Supply Management s non-manufacturing index dropped to the lowest since August 2016 and private American payrolls disappointed analysts and economists. Bearish sentiment also seeped in from a government report of swelling U.S. crude inventories. Oil stockpiles rose for the third consecutive week as refiners started seasonal repairs and other work, reducing crude processing to the lowest level since March.
Saudi Arabias speedy recovery from crippling attacks on oil infrastructure last month also undermined prices.
Two weeks ago, there was a sense we might go to war, said Ellen Wald, president of Transversal Consulting, an energy and geopolitics consultancy. But thats been significantly relaxing as parties are indicating more interest in a dialogue.
West Texas Intermediate for November delivery settled down 19 cents to $52.45 a barrel on the New York Mercantile Exchange.
Brent for December settlement rose 2 cents to close at $57.71 on the ICE Futures Europe Exchange. The global benchmark crude traded at a $5.35 premium to WTI for the same month.
READ: In a Sated Oil Market, Saudi Arabia Attack Sinks Without Trace
--With assistance from Grant Smith.
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