Oil is on its way to losing 5% in the weekly price

Brent crude is poised to post a decline of more than 5% this week, while WTI is headed for a 4% decline.

“Oil prices are likely to remain afloat until the buoyancy of Chinese demand recovery or the consequences of the EU embargo and price cap becomes clearer,” Commerzbank said.

ANZ analysts pointed to a strong Traffic surge in China’s 15 largest cities after Lunar New Year holiday, but they also noted that Chinese merchants had been “relatively absent.”

A slightly stronger dollar ahead of the release of US jobs data dampened gains. A stronger US currency may dampen demand for oil, as it tends to make the dollar commodity more expensive for holders of other currencies.

US job growth in January is likely to have remained strong thanks to the resiliency of the labor market, but expectations of a continued slowdown in wage gains offer the Federal Reserve some reassurance in its fight against inflation, according to a Reuters poll showed.

The US central bank cut rate hikes to a softer rate than last year, but policymakers also anticipated that “continued increases” in borrowing costs would be required.

“Interest rate hikes in 2023 are likely to weigh on the US and European economies, raising fears of an economic slowdown that is likely to dent global demand for crude oil,” said Priyanka Sachdeva, market analyst at Phillip Nova. .

Investors are also watching developments in the ban imposed by the European Union on Russian refined products on February 5, and EU countries are trying to reach an agreement on Friday to set price caps for Russian oil products.

The Kremlin said on Friday that an EU embargo on Russian refined oil products would further unbalance global energy markets.