Commodity Market: WTI Crude Oil heads for biggest weekly loss since early February on US growth, fuel demand concerns

Futures on US West Texas Intermediate Crude Oil headed for their sharpest weekly loss since early February due to concerns faster interest rate hikes in the United States could slow growth and hamper fuel demand in the world’s biggest economy.

Expectations of further policy tightening in both the United States and the Euro Area have dimmed global growth prospects, pushing both WTI and Brent Futures down more than 5% for the week.

In a testimony, Federal Reserve Chair Jerome Powell told the US House of Representatives Financial Services Committee on Wednesday that the central bank was mulling higher and potentially faster interest rate hikes. Yet, Powell noted such a debate was still underway and a decision depended on data due to be released prior to the Fed’s policy meeting this month.

Despite that the number of Americans who filed for unemployment assistance rose the most in 5 months last week, according to the latest data, the US labor market is still considered tight.

More comprehensive US employment data, due out later on Friday, may provide more clues on the labor market health as well as interest rate direction.

“All eyes are on U.S. data due later today, the most important guide before the Fed unleashes a rate hike,” analysts at Haitong Futures wrote in an investor note.

Meanwhile, market players are also closely watching export reductions by Russia, as the country decided to cut oil production by 500,000 barrels per day in March.

As of 10:18 GMT on Friday WTI Crude Oil Futures were losing 0.73% to trade at $75.17 per barrel.

WTI Crude Oil Futures have lost 5.38% so far this week, following a 4.20% gain in the prior week.

At the same time, Brent Oil Futures were losing 0.43% on the day to trade at $81.24 per barrel.

Brent Oil Futures have retreated 5.20% so far this week, following a 3.21% gain in the previous week.