SINGAPORE: Oil prices were little changed on Friday, with key benchmarks headed for a second straight week of losses, as markets awaited signs of recovery in fuel demand in China to offset losses in other major economies. can be compensated.
Brent crude futures fell 16 cents, or 0.2 percent, to $82.01 a barrel by 0445 GMT, while US West Texas Intermediate crude futures fell 17 cents, or 0.2 percent, to $75.71.
So far this week, Brent has fallen more than 5 percent, up 1 percent from the previous week. WTI has also declined by around 5 per cent after falling by 2 per cent in the previous week.
Mixed signs of recovery in fuel demand in China, the world’s top oil importer, kept prices under pressure.
ANZ analysts pointed to a sharp jump in traffic in China’s 15 biggest cities after the Lunar New Year holiday, but also noted that Chinese merchants were “relatively absent”.
The prospect of an economic rebound in China after the easing of COVID-19 restrictions has weighed on the oil market so far this year, along with a weaker dollar that makes the commodity cheaper for those holding other currencies.
The dollar fell as aggressive interest rate hikes by the US Federal Reserve are no longer expected. Central banks for other major economies, however, have continued with large rate hikes, even as inflation eases.
While supported by a weaker greenback, oil’s gains were limited by the prospect of slower growth in the US, the world’s biggest oil consumer, and recessions in places including Britain, Europe, Japan and Canada.
“The crude demand outlook needs a clear signal that China’s reopening will be smooth and US economic growth momentum will not deteriorate quickly,” OANDA analyst Edward Moya said in a note.
The US central bank made a modest rate hike a year after the big hike, but policymakers also forecast “an ongoing increase” in borrowing costs would be needed.
Priyanka Sachdeva, market analyst at Philip Nova, said the upcoming interest rate hike in 2023 is likely to put pressure on the US and European economies, raising fears of an economic slowdown, which is likely to dampen global crude demand. .
Investors are also watching developments on an EU ban on Russian refined products on February 5 as EU countries will strike a deal on Friday to set a price cap for Russian oil products.