Oil gains but headed for second week of losses

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Oil gains but headed for second week of losses

MELBOURNE Reuters - Oil prices made modest gains in early trade but were heading for a second straight week of losses, as the market looked for signs of a rebound in fuel demand in China to offset looming slumps in other major economies.

The price of crude futures went up 16 cents, or 0.2%, to $82.33 a barrel at 0110 GMT, while the U.S. West Texas Intermediate WTI crude futures gained 18 cents, or 0.2%, to $76.06 a barrel.

So far this week, Brent has dropped by 4.8%, extending a 1.1% loss from the previous week. The WTI fell by 4.5% after slipping 2% in the previous week.

There have been mixed signs of a fuel demand recovery in China, the world's top oil importer.

The prospect of an economic rebound in China after COVID 19 curbs have been loosened has buoyed the oil market this year, along with a weaker dollar that makes the commodity cheaper for those holding other currencies.

The dollar has fallen because of the aggressive interest rate hikes by the U.S. Federal Reserve are no longer expected, while other major economies are continuing with larger rate increases even as inflation has eased.

Although supported by a weaker dollar, oil's gains have been limited by the prospect of slow growth in the United States, the world's biggest oil consumer, and recessions in places like Britain, Europe, Japan and Canada.

OANDA analyst Edward Moya said in a note that China's reopening needs to be smooth, and that the U.S. economic growth momentum does not deteriorate quickly.