Oil dipped for a second session in early trade on Friday, trimming a weekly gain, as investors weighed concerns over a global economic slowdown against a bullish outlook for Chinese demand following the end of Covid Zero.
Brent crude futures fell 19 cents, or 0.22%, to $84.31 a barrel by 10.28 A.M. (Thai time), while U.S. West Texas Intermediate (WTI) crude futures fell 29 cents, or 0.37%, to $77.77.
As worries about additional abrupt interest rate hikes by the U.S. Federal Reserve have subsided, Brent and WTI have risen by more than 5% so far this week, recovering much of last week’s losses.
A survey released on Thursday showed an unexpectedly large spike in new claims for unemployment insurance in the United States, contributing to renewed recession fears.
With crude supplies at their highest level since June 2021, new data on U.S. oil inventories this week added to concerns about a slowdown in the world’s largest economy.
In addition, the market received a boost from Saudi Arabia’s decision to raise official crude sales prices to Asia, which was taken as an indication of a rebound in Chinese demand.
Risk sentiment and the dollar’s trajectory, according to analysts, will be heavily influenced by U.S. inflation data on February 14.