Oil set to end week lower

New York — Oil prices fell on Friday, putting them on track for a second weekly decline, as a strong dollar and mixed economic signals weighed on investor sentiment.

Brent crude prices fell by 38 cents, or 0.5%, to $84.73 a barrel by 12.35am GMT. US West Texas Intermediate crude futures fell 50c, or 0.6%, to $82.32 a barrel. On a weekly basis, Brent crude was down 0.3% while WTI was trading marginally higher after slipping as much as 0.2% on Friday.

The dollar index climbed for the second consecutive session after stronger-than-expected data on the US labour market and manufacturing earlier in the week. A stronger greenback dampens demand for dollar-denominated oil from investors holding other currencies.

Meanwhile, a lack of concrete stimulus measures from top oil importer China has weighed on commodities, ANZ analysts said in a note.

China’s economy grew at a slower-than-expected 4.7% pace in the second quarter, official data showed, sparking concerns about the country's oil demand.

“Concerns over supply in the short term kept the losses minimal,” ANZ said, referring to worsening wildfires threatening production in Canadian oil sands.

Elsewhere on the economic front, Japan’s core inflation perked up in June, leaving the door open for an interest rate hike in the major oil market.

Oil prices found some support in the prior two sessions after the US government reported a bigger-than-expected weekly decline in oil stockpiles.

However, analysts at consultancy firm FGE said broader inventory trends looked more bearish than expected in July. They noted that crude stocks had drawn at a slower than usual pace for this time of the year and global fuel stocks rose last week.

Meanwhile the Opec+ producer group was unlikely to recommend changing the group’s output policy, including a plan to start unwinding one layer of oil output cuts from October, three sources told Reuters on Thursday. 

Reuters