Oil declined on Thursday as bad U.S. economic data fueled fears about a worldwide recession and demand contraction, although benchmark prices rose for the week after OPEC+ announced more supply cuts and U.S. oil stockpiles fell.
Around 0616 GMT, Brent oil futures lost 41 cents, or 0.5%, to $84.58. WTI fell 45 cents, or 0.6%, to $80.16 a barrel.
As OPEC+ announced voluntary production cutbacks, Brent and WTI have risen over 6% this week, heading for three straight weeks of oil gains.
“Weak economic statistics halted crude oil’s surge. Despite better fundamentals, “ANZ Research noted.
When demand cooled in March, the U.S. services sector slowed more than predicted, and a measure of services industry pricing fell to the lowest in nearly three years, helping the Federal Reserve combat inflation.
On Wednesday, New Zealand’s central bank boosted interest rates unexpectedly, and India may follow suit.
In February, U.S. job vacancies fell to their lowest in nearly two years, indicating a cooling labor market. Soft economic news spooked investors and fueled recession concerns.
On Thursday, the dollar index rose from a two-month low. When foreign currencies become more costly, a higher dollar may reduce oil demand.
“A downturn in the U.S. economic outlook is impacting on the upside on U.S. oil prices,” said National Australia Bank analysts Baden Moore and Adam Skelton.
Saudi Arabia, the world’s largest oil supplier, boosted its flagship crude for Asian clients for a third month, supporting the market.
ANZ Research said this indicates regional demand strength.
Government statistics indicated U.S. oil stockpiles declined by 3.7 million barrels last week, 1.5 million more than expected.
Gasoline and distillate stockpiles declined more than projected by 4.1 million and 3.6 million barrels, respectively.
