Investing.com -- Oil prices edged higher Friday, but are on course for another monthly decline on concerns that slowing global economic growth will weigh heavily on crude demand as the year progresses.
By 08:50 ET (12:50 GMT), U.S. crude futures traded 0.7% higher at $75.28 a barrel, while the Brent contract rose 0.9% to $78.91 a barrel.
Both benchmarks are set to decline over 3% this week, taking their drops close to 10% over the past two weeks and another losing month, the sixth in a row in the case of the U.S. contract and fourth for Brent.
Traders fear aggressive rate hikes by most of the West’s central banks, and the U.S. Federal Reserve in particular, will result in large parts of Europe as well as the U.S. falling into recession later this year, severely hitting economic activity and thus demand for oil.
Data on Thursday showed that U.S. economic growth slowed more than expected in the first quarter, and numbers released Friday showed that the German economy, the largest in the eurozone, stagnated in the first quarter.
"The German economy remained stuck in the mud at the start of 2023, only barely avoiding recession," Pantheon Macroeconomics' chief eurozone economist Claus Vistesen said.
And yet, despite this slowdown, the Federal Reserve, the European Central Bank and the Bank of England are set to lift interest rates once more in the coming days as inflation remains elevated.
The Fed’s favorite gauge of inflation, the core PCE price index, rose 0.3% on the month in March, up 4.6% on an annual basis, suggesting prices remain sticky at a high level.
Even in Asia, where most expectations of growth this year lie, a hoped-for major rebound in China is still yet to eventuate, while falling refiner profit margins in the region are also signaling demand weakness.
Crude prices have fallen below the $80 a barrel level that many see as the line in the sand for the Organization of Petroleum Exporting Countries and allies, yet Russian Deputy Prime Minister Alexander Novak said on Thursday that the OPEC+ producer group saw no need for further output cuts.
Novak did, however, provide some hope for oil bulls, by adding that the cartel is always able to adjust its policy quickly.
The group announced a surprise production cut at the start of this month in order to support prices.
In corporate news, both Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) reported mammoth profits, with Exxon in particular reporting its best-ever start to a year.
The week ends with the release, as usual, of the Baker Hughes count of U.S. oil wells as well as the CFTC crude positioning data.