Oil prices decline but head to record weekly gains

Oil prices fell in early trading on Friday, but were set to close the week on the rise thanks to positive economic data from the United States and China and a decline in US crude inventories.

According to Reuters, Brent crude futures fell 32 cents, or 0.39%, to $82.12 per barrel by 0115 GMT, while US West Texas Intermediate crude fell 41 cents, or 0.5%, to $76.95.

Brent crude oil is heading to end the week up 4.5%, while the US benchmark crude oil is heading for a weekly gain of 4.8%. The two raw materials are heading up for the second week in a row.

Sources said that Chinese officials asked their Iranian counterparts to help curb Houthi attacks on ships in the Red Sea, otherwise trade relations with Beijing would suffer damage, which represented a step that helped allay fears of possible supply disruption.

This week, prices received support from a larger-than-expected decline in US crude inventories, in addition to strong economic data from the United States and China, and fears of supply disruption after a Ukrainian drone attack on an oil refinery in southern Russia.

The Energy Information Administration said on Wednesday that US crude oil inventories fell by 9.2 million barrels after winter weather affected crude production.

On the demand side, data showed that the US economy grew more than expected in the fourth quarter, and China announced a significant reduction in banks’ reserve requirements with the aim of stimulating growth.

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