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Oil slips to $108, heads for second weekly drop

Oil fell on Friday to around $108 a barrel and was heading for its second weekly drop, pressured by expectations US economic growth will not be strong enough to bolster the demand outlook and by Europe’s debt crisis.

The world’s biggest economy is likely to have grown at an annual rate of 1.9 percent in the third quarter, a Reuters poll showed, still short of the pace economists say is needed to make much of a dent in the unemployment rate.

Brent crude fell 30 cents to $108.19 a barrel by 0757 GMT, having fallen as low as $107.40 earlier.

It rose on Thursday after seven declines that marked its longest losing streak since July 2010. US oil slipped 77 cents to $85.28.

Oil has been dragged lower this week by rising US inventories, poor earnings and Europe’s financial crisis. Results from Apple and Amazon undershot expectations, while on the oil patch Norway’s Statoil cut its 2013 output guidance.

“Commodity prices continue to be stifled by global demand concerns, with the US corporate earnings season not exactly painting a picture of economic health for the coming year,” Tim Waterer, sales trader at CMC Markets, said in a report.

Brent was set to fall for a second week following last week’s decline of nearly 4 percent, leaving prices little changed from the end of 2011. US crude was heading for a weekly drop of around 5 percent.

While the demand outlook weighs on the market, supply-side problems have prevented a further decline for Brent. The European benchmark has gained support this week from production shutdowns in Nigeria and the North Sea.

Investors were keeping an eye on Hurricane Sandy, which swelled into a major threat to much of the US East Coast on Thursday after lashing Cuba with heavy rains and high winds and swirling through the Bahamas.

The storm may force oil refineries in New Jersey and Pennsylvania to slow or shut some operations, hurting gasoline and heating oil on the east coast.