Oil prices were on track for a weekly loss, despite a rise on Friday on strong economic data in the euro zone and Britain, as economic and interest rate uncertainty weighed.
Brent futures for June delivery rose 70 cents, or 0.86%, to $81.80 a barrel by 1343 GMT. West Texas Intermediate crude (WTI) for June delivery was up 74 cents, or 0.96%, at $78.11.
Both benchmarks had slid by more than 2% on Thursday – to their lowest since the unexpected announcement in early April of production cuts by some OPEC countries – and remain on track for a weekly drop of about 5%.
Losses in early Friday trading reversed after surveys showed that the euro zone economic recovery gathered pace this month.
Demand rose in the bloc’s dominant services sector, more than offsetting a deepening downturn in manufacturing.
“It looks like the economy is rebounding from a feeble winter at the moment, but manufacturing weakness remains a concern and dampens the upturn,” ING economics said in a note.
British businesses also reported a bounce in activity and the slowest input cost inflation in more than two years, an industry survey showed on Friday.
The prospect of tighter supply added further support, with analysts expecting draws from inventories from next month, owing to OPEC’s reduced output targets and rising Chinese demand.
“The foreseeable tightening of supply is likely to push prices up in the medium term,” Commerzbank said in a note.
Oilfield services giant SLB beat Wall Street estimates for first-quarter profit on Friday, as elevated crude prices and tight supplies increased demand for its services.
However, economic uncertainty and the prospect of rising interest rates continued to hang over oil markets.
“At the core of the current bout of price malaise are concerns that rising interest rates could hit economic growth,” said Stephen Brennock of oil broker PVM.
The US Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates when they meet in the first week of May.
Published in The Express Tribune, April 22nd, 2023.
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