Futures on US West Texas Intermediate Crude Oil surged more than 1% on Friday, but were still heading for their third consecutive weekly loss on concerns over a weakening US economy and slowing China demand.
WTI Crude Oil Futures have retreated 9.39% so far this week, following another 1.20% loss in the prior week.
Brent Oil Futures have retreated 7.34% so far this week, following another 2.60% loss in the previous week.
Concerns over a US regional banking crisis still remained after PacWest Bancorp announced it would explore strategic options.
“It has been a double whammy for oil prices,” Jun Rong Yeap, market strategist at IG Markets, was quoted as saying by Reuters.
“Renewed U.S. banking fallout (has prompted) fears of a wider contagion and amplifying recession talks, while a surprise contraction in China’s manufacturing activities pushed back against reopening optimism on oil demand outlook.”
China’s manufacturing activity surprisingly shrank in April as new orders decreased, while services sector activity grew at a slower rate, the latest data showed.
On the other hand, the oil market has received certain support on the back of expectations of potential output cuts at the upcoming OPEC+ meeting in June.
Market players now turn their attention to the key US employment data for April due out later on Friday along with monetary policy remarks from St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari at the Economic Club of Minnesota.
As of 8:13 GMT on Friday WTI Crude Oil Futures were gaining 1.41% to trade at $69.53 per barrel.
At the same time, Brent Oil Futures were gaining 1.49% on the day to trade at $73.58 per barrel.