Despite modest improvements on Friday, oil prices were heading for a second week of losses. The weak US economic data and a lack of certainty regarding future interest rate increases affected the situation drastically.
The more actively traded July contract was up 47 cents, or 0.6%, at 78.69 a barrel. Meanwhile, June Brent crude futures increased 44 cents, or 0.6%, to $78.81 a barrel at 0400 GMT. At $75.16 a barrel, West Texas Intermediate (WTI) crude for the United States was up 40 cents or 0.5%.
As of 4:00 GMT this week, both benchmark contracts had decreased by around 3.5%.
In fact, data showed that the United States economy grew less slowly than anticipated in the first quarter. However, jobless claims decreased in the week ending April 22,
Investors are also concerned that possible interest rate increases by central banks battling inflation may slow economic development and reduce energy demand in the US, UK, and the EU.
The US Federal Reserve, the Bank of England, and the European Central Bank will raise interest rates during their upcoming meetings. The Fed will have a meeting on May 1-2.
Due to a mix of positive and negative data, the oil market is quiet
According to Satoru Yoshida, a commodity analyst at Rakuten Securities, oil investors are anticipating the Fed and other central banks’ decisions next week for clues about the future course of interest rates and the state of the world economy.
On Thursday, US stocks ended the day higher as investors ignored warning indications of economic deterioration thanks to good earnings.
On the supply side, Russian Deputy Prime Minister Alexander Novak said on Thursday that despite weaker-than-expected Chinese demand, the OPEC+ group did not feel the need to reduce output further. However, the organization could always change its policy if necessary.
Oil prices rose this month when OPEC and its allies, which include Russia, known as OPEC+, set up an agreement. They negotiated a supply reduction of almost 1.16 million barrels per day.
Following the OPEC+ announcement, the oil market rose. However, it has since declined due to worries about a potential recession and its potential effects on demand.
Data from the Energy Information Administration earlier this week revealed that US crude oil and gasoline inventories dropped more than anticipated last week as demand for the fuel increased in advance of the busiest driving season of the year.