Last Update: May 12, 2023, 23:45 IST
As concerns grew that the United States – the world’s largest oil consumer – would enter a recession, talks on a US government debt ceiling were postponed. (Image: Reuters file)
Brent crude futures fell 59 cents, or 0.8%, to $74.39 a barrel as of 12:07 p.m. EDT (1707 GMT).
Oil prices fell on Friday and were set to end the week at a third consecutive week’s low as the market balanced supply fears against renewed economic concerns in the United States and China.
Brent crude futures fell 59 cents, or 0.8%, to $74.39 a barrel as of 12:07 p.m. EDT (1707 GMT). West Texas Intermediate (WTI) US crude futures fell 55 cents, or 0.8%, to $70.32.
Both the benchmarks are on track to end lower by around 1% week-to-week.
The US dollar held on to modest gains against the euro on Friday and was headed for its biggest weekly gain since February, as uncertainty around the US debt ceiling and monetary policy prompted a shift to safe havens. [=EUR]
A stronger dollar makes dollar-denominated oil more expensive for holders of other currencies.
“The lack of confidence in the economy is holding the dollar back to safe havens, and is also creating pessimism about oil demand,” said John Kilduff, partner at Again Capital LLC in New York.
Concerns grew that the United States – the world’s biggest oil consumer – would enter a recession, talks on a US government debt ceiling stalled and concerns grew over another beleaguered regional bank.
Fed Governor Michelle Bowman said on Friday the US Federal Reserve will probably need to hike interest rates further if inflation remains high, adding data this month did not give her confidence that price pressures are abating.
Meanwhile, China’s April consumer price data rose at a slower pace than March, missing expectations, while deepening factory gate deflation fueled doubts about its recovery from COVID restrictions, boosting oil demand.
Markets drew some support from forecasts of a looming supply deficit for the second half of the year, even as Iraq’s Oil Minister Hayan Abdel-Ghani told Reuters on Friday he does not expect OPEC+ to meet next week. BAR will decide on production cuts to be carried out in Vienna. June 4.
The producer group expects demand for its own crude to be 90,000 barrels per day (bpd) higher in July-December than previously estimated, an OPEC report said on Thursday.
The Organization of the Petroleum Exporting Countries (OPEC) on Thursday kept its global oil demand forecast for 2023 unchanged, expected to offset economic risks from higher Chinese demand growth.
The market was also supported after US Energy Secretary Jennifer Granholm indicated that the country could repurchase oil for the Strategic Petroleum Reserve (SPR) after meeting Congressional mandated sales next month.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
