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London — Oil remained on track for a third weekly gain on Thurday as further production cuts targeted by Opec+ and a drop in US oil inventories overshadowed fears over global economic growth.
Brent and US crude have both gained more than 6% this week after oil cartel Opec+ pledged surprise production cuts on Sunday.
Crude dipped on Thursday, however, as weak US economic data raised concern over economic growth. The US services sector slowed more than expected in March and US job openings in February dropped to their lowest in nearly two years.
“The oil market’s bullish momentum may have paused, but upside potential remains given the tightening supply backdrop,” said Stephen Brennock of oil broker PVM.
Brent crude fell 17c, or 0.2%, to $84.82 a barrel by 10.32am GMT. West Texas Intermediate US crude dipped by 16c, or 0.2%, to $80.45. There is no trading on Friday because of the Good Friday holiday.
The US dollar index strengthened on Thursday, rebounding from a recent two-month-low. A stronger dollar makes crude becomes more expensive for holders of other currencies and tends to reflect greater risk aversion among investors.
“A slowdown in the US economic outlook is weighing on the upside on US oil prices, however we continue to expect a further uptick in oil prices to the end of the quarter,” National Australia Bank analysts Baden Moore and Adam Skelton wrote in a note.
Also underpinning the market was this week’s snapshot of US supply, which showed crude inventories fell by a more than expected 3.7-million barrels while petrol and distillate inventories also declined, hinting at rising demand.
Reuters
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