Oil prices head for worst monthly figures since November

London — Oil prices dipped on Friday, with benchmarks heading for their weakest monthly performances since November, ahead of key US inflation data which could give clues on future interest rate moves and the strength of the dollar.

Brent futures, which have risen nearly 5% this week, were down 63c, or 0.8%, at $78.64 a barrel at 8.24am GMT. US West Texas Intermediate (WTI) crude fell 44 cents, or 0.5%, to $73.93, having gained about 7% so far this week.

The contracts were set for 6% and 4% monthly drops, respectively, after hitting their lowest since 2021 earlier in March in the wake of the largest bank failures since the 2008 financial crisis.

Worries about a full-blown global banking crisis have abated after two banks, in the US and Europe, were rescued.

Markets are now waiting for US personal consumption expenditures (PCE) inflation figures, tracked closely by the Federal Reserve, which are due at 12.30pm GMT.

Economists polled by Reuters expect the core PCE index to ease to 0.4% in February from January and stay broadly steady on an annual basis at 4.7%.

On Thursday, the US House of Representatives passed a bill intended to bolster US oil and gas production while scaling back climate initiatives.

Oil prices were buoyed after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.

Also sending a bullish signal was data showing US crude oil stockpiles fell to a two-year low.

Prices have also found support as China’s manufacturing activity rose in March, exceeding expectations, albeit at a slower pace compared with record-breaking expansion in February.

With oil prices recovering from recent lows, Opec+ are likely to stick to their existing deal to cut oil output at a meeting on Monday, sources said. 

Reuters