Oil on track for weekly drop of about 6%

London — Oil prices were on track for a hefty weekly loss as economic and interest rate uncertainty weighed, though prices were stable on Friday as the eurozone recovery gathered pace unexpectedly.

Brent futures for June delivery edged down by 4c, or 0.05%, to $81.06 a barrel at 0932 GMT. West Texas Intermediate crude (WTI) for June delivery was down 1c , or 0.01%, at $77.36.

Both benchmarks had slid by more than 2% on Thursday to their lowest since late March and remain on track for a weekly drop of about 6%.

Losses in early trading on Friday stabilised after news that the eurozone economic recovery gathered pace this month.

Demand rose in the bloc’s dominant services sector, more than offsetting a deepening downturn in manufacturing, surveys showed.

“It looks like the economy is rebounding from a feeble winter at the moment, but manufacturing weakness remains a concern and dampens the upturn,” ING economics said in a note.

Economic uncertainty remains at the forefront of the oil market.

Data released on Thursday showed US weekly jobless claims rose last week, raising fears of a recession and of lower fuel demand from world’s biggest oil consumer.

“At the core of the current bout of price malaise are concerns that rising interest could hit economic growth,” said Stephen Brennock of oil broker PVM.

The US Federal Reserve, the Bank of England and the European Central Bank are all expected to raise interest rates when they meet in the first week of May, seeking to tackle stubbornly high inflation.

However, oil prices could be supported by draws from inventories from next month owing to producer group Opec’s reduced output targets and accelerating Chinese demand, PVM’s Brennock said.

Reuters