Oil heads for a weekly decline amid concerns regarding US economy

Oil prices witnessed a slight rise in early trading on Friday amid possibilities that the OPEC+ alliance will maintain production cuts, but Brent and West Texas Intermediate crude are heading to record a weekly decline against the backdrop of concerns related to the American economy.

According to Reuters, Brent crude futures for July rose 16 cents to $83.83 a barrel by 0008 GMT, and US West Texas Intermediate crude for June rose 19 cents to $79.14 a barrel. But both crude oil prices are on track to record weekly losses, amid investors’ concern that keeping interest rates high for a longer period may curb growth in the United States, the world’s largest oil consumer.

Brent is heading towards a weekly decline of 6.3%, while West Texas Intermediate crude is heading towards a loss of 5.6% during the week.

The decline comes weeks before the next meeting of the Organization of the Petroleum Exporting Countries and its allies led by Russia within the grouping known as OPEC+.

Three sources from OPEC+ producers said that the group may extend its voluntary oil production cuts of 2.2 million barrels per day beyond June if demand for oil does not increase. It should be noted that the group has not yet begun its official preliminary talks for the meeting scheduled for June 1.

The market is now awaiting economic data from the United States, as the Bureau of Labor Statistics will release the monthly non-farm payrolls report on Friday, which is a measure of the strength of the labor market in the country and is taken into account by the Federal Reserve (the US central bank) when setting interest rates.

High interest rates usually affect the economy and can reduce demand for oil.