Oil fell for a fourth session on Friday, heading for its biggest weekly loss in five weeks on worries about the prospect of steep interest rate hikes in the United States slowing growth and hitting fuel demand.
U.S. West Texas Intermediate crude (WTI) was down 17 cents, or 022%, at $75.36 a barrel.
Expectations of ongoing rate hikes in the world’s largest economy and in Europe have clouded the global growth outlook and driven both crude benchmarks down more than 5.5% so far this week, in their worst drop since early February.
U.S. Federal Reserve Chair Jerome Powell has warned of higher and potentially faster rate hikes, saying the Fed was wrong in initially thinking inflation was “transitory” and was surprised by the strength of the labour market.
The labour market is still seen as tight, even after the number of Americans filing new claims for unemployment benefits increased by the most in five months last week.
“Investors have become increasingly cautious,” analysts from Haitong Futures said in a note.
The prospect of the U.S. jobs report on Friday leading to faster rate hikes has already triggered steep declines in financial markets, and analysts expect oil prices could also be under pressure.
“All eyes are on U.S. data due later today, the most important guide before the Fed unleashes a rate hike,” Haitong analysts said.
On the supply side, the United States was reported having privately urged some commodity traders to shed concerns about shipping price-capped Russian oil in a bid to shore up supply, which suggested more Russian oil might flow into the market.
Investors are closely monitoring export cuts from Russia, which decided to trim oil output by 500,000 barrels per day in March.
Reuters this week reported that Russia plans to cut oil exports and transit from its western ports in March by 10% on daily basis from February.