*
U.S. jobless claims fell in Feb. 11 week
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Dollar rises as strong U.S. data feeds rate hike fears
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U.S. crude inventories log large build
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OPEC+ deal to continue to end of year -Saudi energy
minister
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China to account for nearly half of 2023 oil demand growth
-IEA
(New throughout, updates prices, market activity and comments
to settlement)
By Laila Kearney
NEW YORK, Feb 16 (Reuters) - Oil prices settled slightly
lower on Thursday after trading in a narrow range as the market
weighed mixed U.S. economic signals and prospects for a Chinese
demand recovery with a build in U.S. crude stockpiles.
Brent crude futures settled at $85.14 a barrel,
losing 24 cents. U.S. West Texas Intermediate crude (WTI) settled at $78.49 a barrel, shedding 10 cents.
While U.S. data suggested the U.S. jobs market remained robust, a gauge of manufacturing in the mid-Atlantic region unexpectedly plunged. Federal Reserve Bank of Cleveland President Loretta Mester said the central bank could become more aggressive with rate rises if inflation surprises to the upside. The latest reading on inflation showed prices remaining stubbornly high. But Mester does not expect the U.S. to fall into recession.
The dollar briefly climbed to a six-week peak against a basket of currencies after the U.S. data, weighing on oil, as a strong dollar makes the greenback-denominated commodity more expensive for holders of other currencies.
"Brent failed again to move above the 100-day moving average
this week," said UBS analyst Giovanni Staunovo.
The Brent benchmark has been swinging within an $80-$90 a
barrel range for the past six weeks, while WTI has ranged
between $72 and $83 since December.
The Energy Information Administration (EIA) on Wednesday
reported U.S. crude oil stockpiles last week rose to their
highest level since June 2021 after a larger-than-expected
build. "Oil prices are very choppy at the moment, with traders
having a lot to take in," OANDA analyst Craig Erlam said in a
note, pointing to Russia's 500,000 barrel-per-day cut to oil
production in March, a strong Chinese economic recovery and an
uncertain global economic outlook.
The prospect of a Chinese demand recovery has contributed to
bullish sentiment.
China will account for almost half of global oil demand
growth this year after relaxing its COVID-19 curbs, the
International Energy Agency (IEA) said on Wednesday.
The Paris-based watchdog echoed similar views from the
Organization of the Petroleum Exporting Countries, which this
week raised its 2023 global oil demand growth forecast on
Chinese demand growth.
On the supply side, Saudi Energy Minister Prince Abdulaziz
bin Salman said the current OPEC+ deal to cut oil production
targets by 2 million barrels per day (bpd) would be locked in
until the end of the year, adding he remained cautious on
Chinese demand. A plan by the administration of U.S. President Joe Biden
to release more oil from the country's Strategic Petroleum
Reserve would also "most likely limit any rallies that develop
in coming weeks," said Bob Yawger, director of energy futures at
Mizuho in New York.
(Additional reporting by Rowena Edwards in London, Mohi Narayan
in New Delhi; Editing by Marguerita Choy, Bernadette Baum and
David Gregorio)
