Oil prices eased, heading for a weekly decline

Oil prices slid down further, having dipped in the past two days, and nearing their weekly low levels, stirring concerns of a coming recession and a decline in global oil requirements amidst surplus U.S. gasoline stocks.

June Brent futures dropped 14 cents, representing a 0.22% decline, ending at $80.97 per barrel. June delivery of West Texas Intermediate crude decreased 12 cents, equivalent to a 0.23% decrease, to $77.26 per barrel. Both benchmarks retreated more than 2% to their lowest levels on Thursday amid expectations of a possible recession since late March and were on track for a 6% weekly decline.

Market sentiment eased after weak U.S. economic statistics and expectations of an interest rate hike raised concerns about a recession that could dampen oil demand.

WTI oil prices should be around $75-$80 next week as investors look to see if U.S. gasoline demand will pick up over the summer and whether Chinese oil demand will increase in the year’s second half.

Economic reports showed the weekly jobless rate rose last week, suggesting the U.S. labor market is starting to show signs of slowing as the effects of the Federal Reserve’s delay in several interest rate hikes widen, fueling fears of a slowdown in fuel demand.

U.S. crude oil inventories fell more than analysts had expected last week as factory output and exports rose, while gasoline inventories rose unexpectedly on demand.

China might reduce its refined oil export quotas in a second batch by 2023 as domestic demand improves and the need to fuel its oil-based economy diminishes.

In April, oil loadings from Russia’s western ports hit their highest level since 2019 at 2.5 million barrels, despite Moscow’s pledge to cut output.