TOKYO, April 21 (Reuters) – Oil prices were on track for a hefty weekly loss as economic and interest rate uncertainty weighed, though prices were stable on Friday as the euro zone recovery gathered pace unexpectedly.
Brent futures for June delivery rose 11 cents, or 0.14%, to $81.21 a barrel by 1148 GMT. West Texas Intermediate crude (WTI) for June delivery was up 13 cents, or 0.17%, at $77.50.
Both benchmarks had slid by more than 2% on Thursday – to their lowest since the unexpected announcement in early April of production cuts by some OPEC countries – and remain on track for a weekly drop of about 6%.
Losses in early Friday trading reversed after news that the euro zone economic recovery gathered pace this month.
Demand rose in the bloc’s dominant services sector, more than offsetting a deepening downturn in manufacturing, surveys showed.
“It looks like the economy is rebounding from a feeble winter at the moment, but manufacturing weakness remains a concern and dampens the upturn,” ING economics said in a note.
British businesses also reported a bounce in activity this month and the slowest input cost inflation in more than two years, an industry survey showed on Friday, but price pressures still look strong enough for the Bank of England to raise interest rates again next month.
“At the core of the current bout of price malaise are concerns that rising interest rates could hit economic growth,” said Stephen Brennock of oil broker PVM.
The U.S. Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates when they meet in the first week of May, seeking to tackle stubbornly high inflation.
Meanwhile, data released on Thursday showed U.S. weekly jobless claims rose last week, raising fears of a recession and of lower fuel demand from world’s biggest oil consumer.
However, oil prices could be supported by draws from inventories from next month owing to producer group OPEC’s reduced output targets and accelerating Chinese demand, PVM’s Brennock said.
“The foreseeable tightening of supply is likely to push prices up in the medium term,” Commerzbank said in a note.
Reporting by Yuka Obayashi; Editing by Kenneth Maxwell
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