Crude oil rises but registers weekly loss due to economic uncertainty

The prices of Petroleum rose on Friday on strong economic data from the Euro zone and Great Britain, but ended the week with a drop weighed down by the economic uncertainty and the expectations of increases in interest rates.

Brent futures for June delivery rose 56 cents to $81.66 a barrel. West Texas Intermediate (WTI) crude for June delivery rose 50 cents, or 0.17%, to $77.87.

Brent closed the week down 6% and WTI down 5.6%.

Both benchmarks had fallen more than 2% on Thursday, to their lowest level since the unexpected announcement in early April of production cuts by some OPEC countries.

Losses in early trading on Friday were reversed after reports that the euro zone’s economic recovery accelerated this month.

Demand rose in the bloc’s dominant services sector, more than offsetting a deteriorating situation in the manufacturing sector, according to surveys.

British businesses also reported a rebound in activity this month and the lowest input cost inflation in more than two years, an industry survey showed on Friday, but price pressures still look strong enough for the Bank of England will raise interest rates again next month.

The market expects the US Federal Reserve, the Bank of England and the European Central Bank to raise interest rates when they meet in the first week of May, in order to tackle persistently high inflation.

Meanwhile, data released Thursday showed that weekly US jobless claims rose last week, raising fears of a recession and lower demand for fuel from the world’s biggest oil consumer.

However, oil prices could be supported by lower inventories starting next month due to lower OPEC production targets and accelerating Chinese demand, according to Stephen Brennock of the brokerage PVM oil company.

Source: Reuters