May 5 (Reuters) – Oil prices rose on Friday but were poised for a third straight week of losses after markets fell dramatically on fears of a weakening US economy and slowing Chinese demand.
Brent crude was up $1.22, or 1.7%, to $73.72 a barrel by 0754 GMT. US West Texas Intermediate rose $1.11, or 1.6%, to $69.67 after four days of declines that sent the contract to lows last seen in late 2021.
The Brent benchmark was on track to end the week down around 7%, while WTI was set for a 9% loss.
“Rather than underlying fundamentals, concerns over demand related to recession risks and the strain on the US banking sector drove last week’s selling spree,” said PVM oil market analyst Stephen Brennock.
“The result is that there is a large discrepancy between oil balances and oil prices. These disruptions are usually temporary and normal order should be restored soon.”
Concerns over a regional US banking crisis continued after PacWest Bancorp (PACW.O) announced it was reviewing strategic options.
In China, factory activity unexpectedly slowed in April as orders fell and weak domestic demand hurt the sprawling manufacturing sector.
Service activity in China picked up through April, although the pace of that expansion has slowed, data on Friday showed.
However, anticipation of potential supply cuts at the next OPEC+ producer group meeting in June has provided some price support, said Kelvin Wong, a senior market analyst at OANDA in Singapore.
Traders will focus on the release of US jobs data around 1230 GMT and monetary policy comments from St. Louis Fed Chair James Bullard and Minneapolis Fed Chair Neel Kashkari at the Economic Club of Minnesota.
Investors now generally expect the Fed to suspend rate hikes at its June monetary policy meeting.
Reporting by Arathy Somasekhar; Adaptation by Leslie Adler
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Shadia Nasralla
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