Oil heads for another monthly decline

London — Oil prices were heading for another monthly decline on Friday after disappointing US economic data and uncertainty over further interest rate hikes weighed on the demand outlook.

Brent crude futures for June were down 62c, or 0.8%, at $77.75 a barrel by 0851 GMT, while the more actively traded July contract was up 60c , or 0.8%, at $77.62. Brent is set for its fourth straight monthly fall.

US West Texas Intermediate (WTI) crude lost 71c, or 1%, to $74.05 a barrel and is set for its sixth straight monthly decline.

Data on Thursday showed that US economic growth slowed more than expected in the first quarter.

Investors are worried that potential interest rate hikes by inflation-fighting central banks could slow economic growth and dent energy demand in the US, Britain and the EU. The US Federal Reserve’s next policy meeting is over May 2-3.

On the supply side, Russian deputy prime minister Alexander Novak said on Thursday said the Opec+ producer group saw no need for further output cuts despite lower than expected Chinese demand.

Opec and allies including Russia, known collectively as Opec+, this month cut its combined output target by about 1.16-million barrels per day (bpd), which sent oil prices higher.

The market rallied on the Opec+ announcement but has since weakened on concern about possible recession and the impact that would have on demand.

Energy Information Administration data this week showed that US crude oil and gasoline inventories fell more than expected last week as demand for the motor fuel picked up ahead of the peak summer driving season.

Reuters