Oil prices slip, but head for weekly gain despite U.S. downturn fears

Shafaq News / Oil prices fell in early trade on Friday but were still set for a weekly gain with the market continuing to seesaw between fears of a recession hitting the United States and hopes for strong fuel demand recovery in China, the world's top oil importer.

Brent crude futures declined 35 cents, or 0.4%, to $84.15 a barrel by 0400 GMT, while U.S. West Texas Intermediate (WTI) crude futures slipped 41 cents, or 0.5%, to $77.65 a barrel.

The downturn was partly due to a report on Thursday showing the number of Americans claiming unemployment benefits increased more than expected last week, reigniting recession fears.

"Sentiment overnight seemed to be tilted towards the downside after the jobless data in the U.S.," said Baden Moore, National Australia Bank's head of commodity research. "However I expect the China demand recovery will be more material to the price outlook into (the second half of) 2023."

An increase in China's consumer price index (CPI) for January compared with December, with inflation approaching the target of about 3% that the government set last year, added an air of caution for the oil market.

"The rise in China's CPI in January reflected the consumption demand of residents before the Chinese New Year, but the data is not as good as expected, reflecting the slow recovery stage of the economy," said Leon Li, analyst at CMC Markets.

(Reuters)