© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford/File Photo
By Laila Kearney
NEW YORK (Reuters) -Oil prices toggled between negative and positive territory on Friday as hopes of stronger Chinese demand and output cuts by OPEC+ contended with concern about a global economic downturn and the impact of interest rate rises on fuel use.
To fight inflation, the U.S. Federal Reserve is trying to slow the economy and will keep raising its short-term rate target, Federal Reserve Bank of Philadelphia President Patrick Harker said on Thursday in comments that weighed on oil.
But crude is gaining support from a looming European Union ban on Russian oil, as well as the recent 2 million-barrels-per-day output cut agreed by the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+.
was up 4 cents at $92.42 a barrel by 11:13 p.m. EDT (1513 GMT). U.S. West Texas Intermediate crude (WTI) fell 32 cents to $84.19. Contract trading volumes for both benchmarks were about half of the previous session’s volumes.
Traders were squaring up positions ahead of the weekend after the WTI’s November contract expiry increased volatility, said Bob Yawger, director of energy futures at Mizuho in New York.
“We’re trampling all over unchanged,” said Yawger, adding that swings in the U.S. dollar, which typically moves inversely with oil prices, added to choppy trade. [USD/]
Brent, which came close to its all-time high of $147 in March, was on track for a weekly gain of 0.8%, while headed for a loss of about 1.5%. Both benchmarks dropped in the previous week.
Regarding the OPEC+ cut, which was criticized by the United States, Saudi Arabia’s energy minister said the producer group was doing the right job to ensure stable and sustainable oil markets.
Oil gained on Thursday after Bloomberg News reported that Beijing was considering cutting the quarantine period for visitors to seven days from 10 days. There has been no official confirmation from Beijing.
“The knee-jerk price action provided a useful glimpse of what to expect once more punitive restrictions are lifted,” said Stephen Brennock of oil broker PVM, of the market’s rally after the report.
China, the world’s largest crude importer, has stuck to strict COVID-19 curbs this year, weighing heavily on business and economic activity and reducing demand for fuel.