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Investing.com– Oil prices fell slightly in Asian trade on Friday, weighed by persistent concerns over slowing demand following a warning from the International Energy Agency and a swathe of weak economic readings.
Still, crude prices were set for mild weekly gains after clocking volatile swings through the week. A softer offered oil prices some relief, after the greenback fell sharply from three-month highs tracking weak U.S. data.
U.S. inflation data, due later in the day, is now in focus for more cues on the path of interest rates. Stronger-than-expected data released early in the week saw markets largely price out the prospect of early interest rate cuts by the Federal Reserve.
expiring in April fell 0.2% to $82.71 a barrel, while fell 0.1% to $77.49 a barrel by 20:15 ET (01:15 GMT). Both contracts were up about 1% for the week.
But the outlook for oil prices remained dour, especially after an IEA report on Thursday which said that global oil demand was slowing. The organization trimmed its 2024 global oil growth forecast to 1.22 million barrels per day (bpd) from 1.24 million bpd.
The agency also forecast higher supplies in 2024 amid record-high U.S. production and reluctance among members of the Organization of Petroleum Exporting Countries to enact deeper supply cuts. The IEA expects supply to grow by 1.7 million bpd in 2024, up from its prior outlook of 1.5 million bpd.
Recession signals from the world’s biggest economies also cast a pall over oil’s demand prospects. Both the and entered a technical recession in the fourth quarter of 2023, GDP data showed on Thursday.
growth was unchanged in the fourth quarter after the bloc also entered a recession in the third quarter.
The readings factored into concerns that slowing economic growth will pull down oil demand in the coming months. Top importer China is also grappling with a sluggish economic rebound, although the week-long Lunar New Year holiday is expected to offer some support.
On the supply front, inventory data released earlier in the week showed a massive jump in U.S. , as production rebounded to record highs, at above 13 million bpd.
Strong U.S. production is expected to largely plug any supply gaps from the OPEC, as well as potential supply disruptions arising from the Middle East.
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