Oil prices fell by more than 1% at the end of the Friday session, recording losses for the third consecutive week, as the market balanced fears of supply shortages against renewed economic concerns in the United States and China.
Brent crude futures fell 81 cents, or 1.1%, to close at $74.17 a barrel, while West Texas Intermediate crude futures fell by 83 cents, or 1.2%, and closed at $70.04.
Both benchmarks recorded weekly losses of about 1.5%
The US dollar clung to modest gains against the euro on Friday and is heading for its biggest weekly gain since February, as uncertainty over the debt ceiling and US monetary policy led to a shift to safe havens.
It should be noted that the strong dollar makes oil priced in the US currency more expensive for holders of other currencies
“The lack of confidence in the economy translates into appetite for the safer dollar, and also causes pessimism about oil demand,” said John Kilduff, partner at Again Capital in New York.
Concern grew that the United States – the world’s largest oil consumer – would enter a recession, with talks on the US government’s debt ceiling postponed and concern growing about another regional bank hit by the crisis.
Meanwhile, China’s April consumer price data rose at a slower pace than in March, missing expectations, while deepening contraction in factories refocused doubts about their recovery from Covid restrictions that drove oil demand growth.
The market received some support from the expected supply shortages for the second half of this year, even as Iraqi Oil Minister Hayan Abdul Ghani told Reuters on Friday that he did not expect OPEC+ to decide on further production cuts in the coming period during a meeting. June 4 in Vienna
An OPEC report on Thursday revealed that the group expects demand in the July-December period for its crude to be 90,000 barrels per day higher than previously expected.
