Oil prices settle higher, but brace for hefty weekly losses

Oil prices settled higher Thursday, helped by an unexpected draw in U.S. inventories, but remained on course for hefty weekly losses as weak U.S. labor data added to ongoing global demand concerns. 

At 14:30 ET (18:30 GMT), Brent oil futures rose 1.5% to $77.22 a barrel, while West Texas Intermediate crude futures gained 1.5% to $73.01 a barrel.

So far this week, Brent has fallen over 4%, while WTI crude is down 6%. US inventories shrink more than expected 

Official data, released on Wednesday, showed oil inventories shrank by 4.6 million barrels in the week to August 16, much more than the expected 2 million barrels expected.

Additionally, outsized draws in both distillates and gasoline stockpiles suggested that fuel demand remained robust in the largest economy in the world even as the travel-heavy summer season wound down. Weak economic data limit gains 

The U.S. Labor Department reported a rise in the number of jobless claims last week, and larger-than-expected decline in manufacturing activity.  

While concerns about the weakness in the economy has been tempered by expectations for Federal Reserve rate cuts next month, worries about growth bodes poorly for demand in the world’s biggest fuel consumer.

Traders remain uncertain over the outlook for demand later this year, especially after weak economic readings from China fueled concerns over slowing demand in the face of a slowdown in the world’s biggest oil importer.

(Ambar Warrick contributed to this article.)

Source: Investing.com