 "Oil prices")
Oil fell almost 3 per cent on Friday as the market assessed the aftermath of interest rates hikes by central banks, but was still poised for a weekly gain amid supply disruption concerns and hopes for a recovery of demand in China.
The US Federal Reserve indicated it will raise interest rates further next year, even as the economy slips toward a possible recession. On Thursday, the Bank of England and the European Central Bank raised interest rates to fight inflation.
"There are so many driving forces in the oil market at the moment and a more sombre economic outlook on the back of the hawkish central bank message this week appears to be the dominant one going into the weekend," said Craig Erlam, analyst, at OANDA.
Brent crude futures were down $2.08, or 2.6 per cent, to $79.13 per barrel at 1334 GMT. West Texas Intermediate futures slipped $2.07, or 2.7 per cent, to $74.04.
Both benchmarks fell 2 per cent in the previous session as the dollar strengthened and central banks in Europe raised interest rates.
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Still, crude is on track for a weekly gain with sentiment buoyed by potential supply tightness after Canada's TC Energy Corp shut its Keystone pipeline following a leak and by the prospect of demand increasing in 2023.
The International Energy Agency projects Chinese oil demand growth recovering next year by nearly a million barrels per day (bpd) after a 2022 contraction. The agency raised its 2023 global oil demand growth estimate to 1.7 million bpd.
Analysts from J.P.Morgan Commodity Research also expect the United States to start replenishing its strategic petroleum reserves in the first quarter of 2023.
"Based on our quarterly projections, this window (for repurchase) will open in 1Q23 with initial purchase of around 60 million barrels over 1H23," they said.
Investors are still concerned by downside pressures, including the slow recovery of China's demand due to a swelling number of COVID infections and a supply overhang in the West of Suez market.
(Additional reporting by Alex Lawler and Muyu Xu; Editing by Muralikumar Anantharaman and Mark Potter)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
