By Yuka Obayashi and Jeslyn Lerh
SINGAPORE (Reuters) -Oil prices crept higher on Friday, but headed for a second week of declines as disappointing U.S. economic data and uncertainty over further interest rate hikes weighed on the demand outlook.
Brent crude futures for June was up 47 cents, or 0.6%, to $78.84 a barrel at 0656 GMT, while the more actively-traded July contract was 52 cents, or 0.5%, higher at 78.63 a barrel.
U.S. West Texas Intermediate (WTI) crude rose 29 cents, or 0.4%, to $75.05 a barrel.
Both benchmark contracts had fallen by about 3.5% this week as of 0656 GMT.
“Crude oil eked out a small gain following two days of heavy selling amid mixed economic signals,” ANZ analysts said.
U.S. economic growth slowed more than expected in the first quarter, although jobless claims fell in the week ending April 22, data showed on Thursday.
Investors are also worried that potential interest rate hikes by inflation-fighting central banks could slow economic growth and dent energy demand in the United States, Britain and the European Union.
The U.S. Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates at their coming meetings and oil investors are waiting for guidance on the future direction of interest rates and the global economy. The Fed meets over May 2-3.
“The market is quiet due to a mixture of bullish and bearish economic data and as a recovery in the global equity market gave a relief to investors,” said Satoru Yoshida, a commodity analyst at Rakuten Securities.
U.S. stocks closed higher on Thursday as strong earnings helped investors look past signs of economic weakness.
On the supply side, Russian Deputy Prime Minister Alexander Novak said on Thursday the OPEC+ group saw no need for further output cuts despite lower-than-expected Chinese demand, but that the organisation could always adjust policy if necessary.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, this month announced a combined output reduction of around 1.16 million barrels per day, which sent oil prices higher.
The market rallied following the OPEC+ announcement, but has weakened in response to concerns about recession and the impact that would have on demand.
Earlier this week, Energy Information Administration data showed that U.S. crude oil and gasoline inventories fell more than expected last week, as demand for the motor fuel picked up ahead of the peak summer driving season.
(Reporting by Yuka Obayashi in Tokyo and Jeslyn Lerh in Singapore; Editing by Christian Schmollinger, Jamie Freed and Susan Fenton)
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