Oil is on its way to a fourth weekly loss

Oil prices fell on Friday, on track for their fourth weekly decline, as economic concerns in the United States and China renewed concerns about fuel demand growth in the world’s two largest oil consumers.

And by 0510 GMT, Brent crude futures fell 37 cents, or 0.49 percent, to $ 74.61 a barrel. US crude futures fell 30 cents, or 0.42 percent, to $70.57.

And the two benchmarks are on their way to decline about 1 percent during the week, in the longest series of weekly declines since November 2021.

With talks over the US government’s debt ceiling stalled and fears renewed that another US bank is in crisis, concern is growing that the US is entering a recession.

A slump in new loans to businesses in China and weak economic data released there this week also revived doubts about its recovery from Covid restrictions.

Tina Teng, market analyst at CMC Markets in Auckland, said the data on falling inflation in both countries indicated that consumer demand was weak.

“Oil is a growth-sensitive commodity that has been affected by these downside factors,” she added in an email.

Oil rose earlier on Friday, after falling in the previous two sessions, based on some demand expectations following comments from the US Secretary of Energy that the US may buy back oil to fill the Strategic Petroleum Reserve once some sales end in June.

The US government has said it will buy oil when prices are stable in the range of $67-72 a barrel or less.

US Treasury Secretary Janet Yellen urged Congress on Thursday to raise the government’s debt ceiling of $31.4 trillion and avoid an unprecedented default that would trigger a global recession.

Concerns also increased about a banking crisis in the United States, after shares of Bacoist Bancorp fell 23 percent on Thursday. The Los Angeles-based bank said its deposits had shrunk and it was seeking to boost liquidity.

The oil market has largely ignored the forecasts of the Organization of the Petroleum Exporting Countries (OPEC) for global oil demand in 2023, which included the expectation of increased demand in China, the world’s largest oil importer.