Oil prices eased for the third straight day on Friday and look to expect a heavy weekly loss as softening US economic data and rising US gasoline inventories raise concerns about a recession and slowing global oil demand.
Brent futures for June delivery were down 30 cents, or 0.4%, at $80.80 a barrel at 0630 GMT. West Texas Intermediate crude (WTI) for June delivery fell 31 cents, or 0.4%, to $77.06 a barrel.
Both indicators fell more than 2% on Thursday amid recession fears, dropping to their lowest levels since late March and are on their way to about 6% weekly declines.
The market sentiment continued its downward trend amid weak US economic data as well as expectations of interest rate hikes fueling concerns about a recession that could dampen oil demand.
WTI is expected to trade in the $75-$80 range next week as investors try to figure out whether US gasoline demand will increase towards the summer driving season and whether China’s oil demand will actually increase in the second half of the year.
Economic data shows that weekly jobless claims soared last week, suggesting that the US labor market may begin to show signs of slowing as the lagged effect of multiple interest rate hikes from the Federal Reserve dominates, fueling concerns about a slowdown in fuel demand.
Volatility in near-term oil prices is attributed to the market position before the rate hike.
The Fed, BoE and ECB will meet in the first week of May, and the downward pressure on oil prices is expected to continue at these meetings.
Last week, U.S. crude inventories fell more-than-expected as refinery performance and exports surged, while gasoline inventories rose unexpectedly on disappointing demand, the Energy Information Administration (EIA) showed on Wednesday.
Meanwhile, according to a survey, China may reduce its export quotas for refined petroleum products for 2023 in the second batch, as domestic demand improves and the need to stimulate its economy through exports of petroleum products.
On the supply side, despite Moscow’s commitment to curb production, trade and shipping resources say oil shipments from Russia’s western ports in April will hit more than 2.4 million bpd, the highest level since 2019.
