Oil prices are set for weekly gains on renewed enthusiasm around the US economy By Reuters

By Shariq Khan

(Reuters) – Oil prices fell in early Asian trade on Friday, but market benchmarks were set for their second straight weekly gain after upbeat U.S. economic data eased investor concerns about a potential recession in the largest oil consuming nation.

Futures were down 16 cents, or 0.2 percent, at $80.88 a barrel by 0024 GMT. U.S. West Texas Intermediate crude futures were down 23 cents, or 0.3 percent, at $77.93 a barrel.

Brent was expected to advance 1.6% on the week, while WTI was on track for gains of around 1.5%.

Investors found renewed optimism about U.S. economic growth after a slew of data this week.

On Thursday, a government report showed U.S. retail sales rose 1 percent last month, well above market forecasts for a 0.3 percent rise. Also Thursday, data showed that fewer Americans filed new claims for unemployment benefits last week.

“US economic data released this week helped temper fears of a sharp slowdown in the US economy,” said analysts at energy consultancy FGE.

They noted that oil markets will now turn their full attention to fundamentals and geopolitics, with markets anticipating retaliatory strikes by Iran against Israel over the killing of a Hamas leader in Tehran.

A new round of negotiations began on Thursday to secure a ceasefire in the war in Gaza, even as Israeli troops continued their assault on the Palestinian enclave.

The talks, which were boycotted by Hamas, have been extended and will resume on Friday in the Qatari capital Doha.

Keeping oil prices in check, demand signals from the US and China have been shocking. stocks posted a surprise rise earlier this week as Chinese refiners cut crude processing rates sharply last month due to tepid demand for the fuel.

The Organization of the Petroleum Exporting Countries (OPEC) cut its demand outlook for this year on Monday, citing weaker expectations for China.