Singapore, April 6 (BNA): Oil fell on Thursday as weak US economic data raised concerns about a possible global recession and cut demand, but record prices headed for a weekly advance after OPEC+ announced further production cuts and US oil inventories fell.
Brent crude futures fell 41 cents, or 0.5 percent, to $84.58 a barrel by 06:16 GMT. US West Texas Intermediate crude fell 45 cents, or 0.6%, to $80.16 a barrel.
Brent and West Texas Intermediate have risen about six percent so far this week, heading for three consecutive weeks of increase after the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, pledged voluntary production cuts, Reuters reported.
“Crude Oil’s rally was paused as it grappled with headwinds created by weak economic data. This offset the more positive fundamentals,” ANZ Research said in a note.
The US services sector slowed more than expected in March as demand slowed, while a measure of prices paid by service firms fell to the lowest level in nearly three years, giving the Federal Reserve a boost in fighting inflation.
New Zealand’s central bank raised interest rates more than expected on Wednesday, with India likely to be the next country in line to raise record interest rates.
Meanwhile, job openings in the United States fell in February to their lowest levels in nearly two years, indicating a downturn in the job market. A string of weak economic data soured market sentiment, stoking fears of a recession and prompting investors to adopt risk aversion strategies.
The US dollar index strengthened on Thursday, rebounding from a two-month low. A strong dollar may dampen demand for oil as crude oil becomes more expensive for holders of other currencies.
“A slowdown in the US economic outlook is weighing on the upside in US oil prices, but we still expect a further uptick in oil prices through the end of the quarter,” Baden Moore and Adam Skelton, analysts from National Australia Bank, write. On a note.
To support the market, Saudi Arabia, the world’s largest oil exporter, raised the prices of its main crude to Asian buyers for the third month in a row.
“This points to stronger demand in the region,” ANZ Research said.
Government data showed that US crude stocks fell by 3.7 million barrels last week, 1.5 million barrels more than expected.
Gasoline and distillate inventories also fell more than expected, falling by 4.1 million barrels and 3.6 million barrels, respectively.
HF