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Brent crude futures fell 43 cents, or 0.57%, to $74.55 a barrel
by 0931 GMT. West Texas Intermediate (WTI) U.S. crude futures
were down 33 cents, or 0.47%, to $70.54.
Both benchmarks are set to fall by more than 1% for the week,
which would be the longest streak of weekly declines since
November 2021.
With talks over the U.S. government's debt ceiling postponed and
renewed fears that another regional bank is in crisis, there is
mounting concern that the U.S. will enter a recession.
Treasury Secretary Janet Yellen said on Friday that the U.S.
faces financial and economic catastrophe if Congress fails to
raise the debt ceiling.
And the U.S. Federal Reserve will probably need to raise
interest rates further if inflation stays high, Fed Governor
Michelle Bowman said on Friday, adding that data so far this
month has not convinced her that price pressures are receding.
Meanwhile, a decline in new loans to businesses in China and
weaker economic data there earlier in the week refocused doubts
about its recovery from COVID restrictions driving oil demand
growth.
China's April consumer price data rose at a slower pace and
missed expectations, while factory gate deflation deepened,
suggesting more stimulus may be needed.
The decline in oil prices was limited by a signal from U.S.
energy secretary Jennifer Granholm that the country could
repurchase oil for the Strategic Petroleum Reserve (SPR) after
completing a congressionally mandated sale next month.
In addition, the Organization of the Petroleum Exporting
Countries (OPEC) kept its global oil demand forecast for 2023
unchanged, as it expects economic risks to be offset by higher
Chinese demand growth.
"The oil market is barrelling towards a supply deficit, assuming
OPEC delivers on its latest production cuts," said PVM oil
market analyst Stephen Brennock.
(Reporting Rowena Edwards in London, additional reporting by
Yuka Obayashi in Tokyo and Andrew Hayley in Beijing; editing by
Jason Neely)
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