In Asian trade on Friday, oil prices fell slightly as the bullish sentiment over Chinese demand and possible supply cuts in the Middle East eased with uncertainty over economic data from the US on Friday.
Brent futures, which are up nearly 6% this week, were down 19 cents, or 0.24%, at $79.08 a barrel at 0415 GMT. West Texas Intermediate (WTI) crude was down 1 cent, or 0.01%, to $74.36 after gaining nearly 8% this week.
Markets are now awaiting Friday’s US spending and inflation data and its impact on the US dollar. If these data give positive signals to the markets that US inflation is expected to cool down further, the market may continue to recover. Disappointing data could raise concerns about Fed policy again and limit recent gains if happens.
Prices rose this week amid over-optimism about China’s economic recovery. China’s manufacturing activity rose at a slower pace in March compared to the record expansion in February but still beat some economists’ expectations.
Industrial activity in China has become a major determinant factor of prices in recent weeks after ending coronavirus-related restrictions that have caused weak global demand.
The biggest bank failure since the 2008 financial crisis, which frightened traders and alarmed the markets, will limit oil prices second consecutive weekly earnings. Concerns over an advanced global banking crisis eased after the bailouts of two banks in the US and Europe.
Prices rose more than 1% on Thursday due to dropping US crude stockpiles and exports from Iraq’s semi-autonomous Kurdistan region stalled, offsetting pressure from less-than-expected cuts to Russian supplies.
Following the shutdown of the Northern Iraq pipeline, producers closed or reduced production from some oil fields in the semi-autonomous Kurdistan region of Northern Iraq. More cuts are on the horizon.
The U.S. Energy Information Administration (EIA) said U.S. crude inventories unexpectedly fell to a two-year low during the week of March 24.
