Oil prices experienced a slight increase on Thursday; however, they were largely affected by the fear of economic slowdown, resulting in a sharp decline for the week. Despite signs of tightening US supplies, prices were trading close to a one-month low, below the $80 a barrel target by OPEC.
The unexpected production cut of over 1 million barrels per day by OPEC+ and allies resulted in crude prices rising to near $90 a barrel initially, but quickly reversed in recent weeks.
The biggest weight on crude prices was the fear of slowing economic growth, which could impact oil demand. Investors were looking for more cues on that front from first-quarter US GDP data and the Federal Reserve’s preferred inflation gauge, which were due later on Thursday.
The personal consumption expenditures price index was expected to show that inflation remained high in March. The strength of the dollar, uncertainty over US monetary policy, and investors positioning for a 25 basis point rate hike by the Fed next week also weighed on crude prices.
Despite data showing U.S. crude inventories shrank by a bigger-than-expected margin in the week to April 21, markets continued to be uncertain over economic growth and monetary policy.
Brent oil futures rose 0.3% to $77.96 a barrel, while West Texas Intermediate crude futures rose 0.3% to $74.49 a barrel by 00:22 ET (02:22 GMT). Both contracts were trading down over 4% for the week.
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