Oil prices unchanged, gloomy week ahead on demand fears By Investing.com

Investing.com – Oil prices steadied in Asian trade on Friday after recovering in the previous session on some bargain buying, but continued to threaten sharp weekly losses amid ongoing concerns about slowing demand.

Ongoing ceasefire negotiations between Israel and Hamas also caused traders to reduce the risk premium on crude oil. US officials said an agreement was imminent, but Hamas recently criticized a US-brokered ceasefire proposal because it favored Israel.

Oil markets were unsettled by data showing a sharp downward revision to US jobs figures, heightening concerns about a possible recession, but recovered from recent losses on Thursday as data showed a continued decline in US inventories.

October oil expiring rose 0.1 percent to $77.26 a barrel, while by 9:06 p.m. ET (1:06 a.m. GMT) it was up 0.1 percent to $72.34 a barrel.

Oil price faces weekly losses due to demand concerns

Both contracts were expected to lose more than 4 percent each this week after suffering heavy losses on concerns that a recession in the US could hit demand.

Crude oil's losses came even as traders predicted a growing likelihood of a Federal Reserve rate cut in September, which would hurt the dollar. But the greenback rebounded on Thursday.

While U.S. demand has appeared strong in the short term (reflected in government data showing excessive inventory drawdown), traders fear that deteriorating economic conditions could dampen demand in the coming months.

Concerns about an oversupply of oil also played a role after US oil production rose to a record high of over 13 million barrels in early August.

However, recent price weakness may cause the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to scale back some of their plans to increase production later this year.

The cartel recently lowered its forecast for global oil demand, citing concerns about weak demand from China, the largest oil importer.

Ceasefire between Israel and Hamas in focus

US officials said a ceasefire between Israel and Hamas was imminent, but media reports said Israel and Hamas were less confident about an agreement.

Israel reportedly agreed to a bridging agreement proposed by the US earlier this week

However, Hamas had criticized the agreement because it allegedly favored Israel.

The conflict between Israel and Hamas has led traders to add a risk premium to oil prices, fearing that the conflict could spill over into the region and cause supply shortages. However, the conflict has so far had only a limited impact on actual crude oil supplies.