Oil prices fall but set for upbeat week as economic outlook improves By Investing.com

Investing.com– Oil prices edged lower in Asian trade on Friday, but were set for a second straight week of gains as optimism over a resilient U.S. economy and lower interest rates boosted hopes of improving demand.

Continued fear of an Iranian attack on Israel has traders putting a risk premium on crude after Hezbollah and Hamas were seen launching strikes against the country earlier this week.

But crude oil’s overall gains were still held back by lingering concerns about an economic slowdown in top oil importer China, with mixed data released earlier this week doing little to improve sentiment.

U.S. crude that expires in October was down 0.1 percent at $80.94 a barrel, while it was down 0.2 percent at $76.85 a barrel by 9:25 p.m. ET (01: 25 GMT).

Oil set for second week of gains

Both contracts were expected to rise between 1.5 percent and 2 percent this week, with gains coming on strong U.S. economic readings and signs of easing domestic inflation.

rose more than expected in July, boosting hopes that the US consumer will remain resilient and presenting a positive outlook for domestic fuel demand.

In addition, signs of cooling inflation added to the belief that the Federal Reserve will cut interest rates in September.

It fell after weaker inflation data, further supporting oil prices, while the prospect of lower rates presented a positive outlook for crude oil demand.

But an unexpected rise in U.S. inventories suggested demand was cooling as the busy summer travel season drew to a close.

China concerns, demand fears persist

China remained a key point of concern for oil markets as economic activity in the world’s largest oil importer showed little sign of improvement.

The country’s oil imports fell for a second straight month in July, while a number of economic readings for the month were largely negative.

Concerns about China prompted both OPEC and the IEA to cut their forecasts for oil demand growth in 2024, with both citing political uncertainty in the country and persistent weakness in its economy.