Oil looks destined to break last seven weeks’ climb as key US data indicates further interest rate hikes. Similarly, China’s lackluster economic recovery sparks concern among trader.

A barrel of Brent crude futures goes for USD 84.18 on Friday morning, down from USD 84.68 on Thursday afternoon. Simultaneously, US benchmark West Texas Intermediate trades at USD 80.57, down from USD 80.86.

The US Labor Department on Thursday reported the number of Americans filing new claims for jobless benefits fell in the last week, which signals a sound job market which could prolong the Fed’s economic tightening campaign. Initial claims for state unemployment benefits fell to 239,000 last week, which slightly less than expected. Economists polled by Reuters had forecast 240,000 claims for the latest week.

A continued tight labor market could stoke inflation, which is why the US Federal Reserve may continue to raise interest rates in an attempt to cool the world’s largest economy. Further interest rate hikes will increase borrowing costs for businesses and consumers, which could reduce economic activity and thus oil demand.

Meanwhile, disappointing economic data from the world’s second largest oil consumer, China, continues to cast a long shadow over commodity markets. However, oil prices may be on the way up in the coming days, according to Reuters.

It is not certain that US oil production can offset the production cuts from the Organization of the Petroleum Exporting Countries and its allies, OPEC+, analysts tell the news agency. According to ANZ Research, US crude oil inventories fell by almost 6 million barrels last week as the number of weekly oil deliveries in the US rose to the highest level since December.

Elsewhere in commodities, a troy ounce of gold on Friday morning cost USD 1891.24 compared to USD 1896.095 on Thursday afternoon.

(Translated using DeepL with additional editing by Simon Øst Vejbæk)