Oil prices remained little changed in early trading on Friday but were heading for a 3% decline for the whole week due to concerns about fuel demand prospects following a larger-than-expected interest rate hike in the UK and warnings of imminent rate hikes in the US.
Brent futures declined 7 cents, or 0.1%, to $74.07 per barrel, while US West Texas Intermediate (WTI) crude futures fell 11 cents, or 0.2%, to $69.40 at 0026 GMT.
Both benchmarks had dropped by about $3 in the previous session after the UK central bank raised interest rates by half a percentage point, fuelling fears of an economic slowdown that could impact fuel demand.
The interest rate hike weighed more heavily than the support from a surprising decline in US oil inventories.
The market is now awaiting the release of Purchasing Managers Indexes (PMIs) from around the world on Friday for insights into manufacturing activity and demand trends.
Surveys showed that Japanese manufacturing activity contracted again in June, and growth in the services sector slowed for the first time in seven months, as business confidence and demand weakened.
In the US, Federal Reserve Chair Jerome Powell stated that the central bank would now adjust interest rates at a “patient pace” as policymakers move toward ending their historic tightening cycle of monetary policy.
Higher interest rates raise borrowing costs for businesses and consumers, which can slow economic growth and reduce the demand for oil.
