- Oil prices are on course to post a weekly loss for the second week in a row, with economic fears continuing to trump market fundamentals.
- Comments from the Fed that suggested interest rate hikes may become even more aggressive have damaged oil demand expectations.
- News this week that China might ease its Covid restrictions and the EIA’s report of a draw in oil inventories added some upward pressure to prices.
Oil prices were flat early on Friday in Europe and were headed to a second weekly loss in a row, as fears of economic slowdown persisted and offset hopes of rising oil demand from China.
As of 2:58 a.m. ET on Friday, the U.S. benchmark, WTI Crude, was marginally higher by 0.05% at $84.57, and the international benchmark, Brent Crude, traded 0.13% higher at $92.42.
Oil prices were on track to post the second consecutive weekly loss after comments from Fed officials that the interest rate hikes may need to become even more aggressive, considering that the current rate-hike pace is showing no progress in taming inflation.
This week’s likely weekly loss in oil prices would follow last week’s loss which was driven by new inflation data in the U.S. that highlighted looming economic problems.
On Thursday, oil prices rose at intraday trade after China signaled an easing of its strict Covid policy, which has battered market sentiment in recent months. However, the gains lost momentum by the end of trading on Thursday as the market turned again to the fear of slowing oil demand growth amid an economic slowdown.
Philadelphia Federal Reserve President Patrick Harker said on Thursday that “we are going to keep raising rates for a while.”
“Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4 percent by the end of the year,” Harker said in a speech at the Greater Vineland Chamber of Commerce in New Jersey.
“Crude futures were marginally higher mid-morning in Singapore on Friday after settling almost unchanged on Thursday. Brent and WTI futures had surrendered nearly all their sizeable intraday gains by Thursday’s close, suggesting that the previous day’s rally spurred by a bullish set of US oil stocks data did not have staying power,” Vanda Insights said early on Friday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana Paraskova
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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