Oil prices rise from 7-week lows, set for steep weekly losses

Investing.com-- Oil prices rose slightly from near seven-week lows in Asian trade on Friday, and were headed for steep losses this week as signs of robust U.S. stockpiles and production dashed hopes for tight crude markets in the coming months. 

Markets were also on edge  before the release of key U.S. nonfarm payrolls data later in the day, which is likely to factor into the outlook for interest rates. 

Brent oil futures expiring in July rose 0.5% to $84.06 a barrel, while West Texas Intermediate crude futures rose 0.5% to $78.88 a barrel by 21:09 ET (01:09 GMT). Both contracts were trading close to their weakest levels in seven weeks, after heavy losses this week. 

Oil set to lose over 5% this week 

Brent and WTI futures were set to lose between 5% and 6% this week, amid a storm of negative cues for crude markets. 

An unexpected build in U.S. inventories and data showing increased production suggested that oil markets were not as tight as traders were initially hoping. 

This was coupled with easing fears of supply disruptions in the Middle East, as Israel and Hamas continued negotiations over a potential ceasefire. 

Concerns over slowing economic growth- which could eat into demand- also came into play this week, especially after the U.S. Federal Reserve warned that it will keep interest rates higher for longer.

Nonfarm payrolls data due later on Friday is expected to offer more insight on interest rates. 

Middling purchasing managers index data from top crude importer China also factored into fears of sluggish demand. Business activity in the country was seen slowing in April after a strong start to the year. 

Still, crude found some relief on Friday from a softer dollar, as the greenback retreated in anticipation of the nonfarm payrolls data. 

OPEC+ could extend production cuts 

Reuters reported that the Organization of Petroleum Exporting Countries and allies (OPEC+) could potentially maintain their current run of 2.2 million barrels per day of production cuts beyond the end-June deadline, especially if demand does not pick up.

But cartel members are yet to begin formal talks over the matter. Still, extended production cuts by the cartel could herald tighter markets later in 2024.