LONDON:- Oil slid Friday at the end of a tumultuous week, during which prices hit 6.5-year lows on fears over China's slowing but then rebounded on strong US economic growth data. US benchmark West Texas Intermediate (WTI) for October delivery lost 21 cents to $42.35 per barrel. Brent North Sea crude for October dropped 15 cents in early afternoon London deals to $47.41. Both contracts had soared by about 10 percent on Thursday after news the US economy grew at a better-than-expected annual rate of 3.7pc in the second quarter.–AFP
"Yesterday's rebound (in oil prices) does of course follow in the wake of the huge, broad-based sell-off in all markets at the start of the week," said SEB analyst Bjarne Schieldrop.
"When better than expected US GDP data hit the news... yesterday, the equity recovery got additional traction upwards," he added.
World stock markets were hammered on Black Monday -- with Shanghai plunging almost 8.50 percent -- as risk-averse investors dumped shares on spreading panic that the flagging Chinese economy could spark a new world recession.
The oil market had also collapsed Monday to levels last seen during the global financial crisis, with Brent and WTI sinking to $42.23 and $37.75 respectively.
Prices then held close to six-and-a-half year lows on fears about slowing economic growth and faltering demand from top energy consumer China.
Sentiment was soothed by Tuesday's interest rate cut from the People's Bank of China (PBoC).
Crude futures have since bounced back into positive territory for the week on the back of Thursday's brighter-than-expected US growth figures.
The rally comes after the Commerce Department reported the US economy expanded at an annual rate of 3.7 percent in the second quarter, sharply above the initial appraisal of a 2.3 percent gain.
The more robust April-June growth mainly reflected higher investment, state and local government spending, and consumer spending than was reported in the initial estimate.
"We are seeing very strong volumes in Asian trading... there's a bit of shock and disbelief at the strength of the US economic data," CMC Markets strategist Michael McCarthy told AFP.
Investors were also buoyed by strong data on US durable manufactured goods and crude inventories, he added.
Durable goods orders in the world's biggest economy and key global economic growth engine rose two percent in July, boosted by automobiles, the US Commerce Department said.
The latest official stockpiles report released Wednesday meanwhile showed a drawdown, indicating healthy demand.
Output however slipped only slightly, leaving production levels and overall crude inventories at record levels.