Oil prices were set for a weekly loss during the week ending May 24 due to ongoing concerns about the timing of the first interest rate cut by the US Federal Reserve (Fed) and the lower demand outlook in the US, the world's biggest crude consumer.
International benchmark Brent crude traded at $81.19 per barrel at 3.03 p.m. local time (1203 GMT) on Friday, falling by around 3.3% relative to the closing price of $83.98 a barrel on Friday last week.
West Texas Intermediate (WTI), the American benchmark, traded at $76.69 a barrel at the same time on Friday, a decrease of about 4.2% from last Friday's session, which closed at $80.06 per barrel.
Both benchmarks started the week with price rises after Tehran confirmed the deaths of Iranian President Ebrahim Raisi, Foreign Minister Hossein Amir-Abdollahian, and other officials in a helicopter crash in the country's northwestern province on Sunday.
Supply fears in favor of higher oil prices were stoked by worries about the political fallout in the oil-producing country but were later offset by demand concerns in the US.
The US Federal Reserve (Fed) released its minutes on Wednesday, revealing that the policy rate may remain at higher levels for longer than expected, while some bank officials said they were open to increasing interest rates if necessary.
After the minutes were published, the probability of the bank reducing interest rates in September fell to 50% from 65% prior to their release.
Fed official statements warning against acting hastily on interest rate cuts raised concerns of a faltering demand appetite in global oil markets.
Further signaling a drop in demand in support of lower prices were the results of the Energy Information Administration's (EIA) inventories on Wednesday, which showed a stock build that far exceeded market expectations.
US commercial crude oil inventories increased by 1.8 million barrels during the week ending May 17, against the market expectation of a drop of around 2.4 million barrels.
Over the same period, strategic petroleum reserves, which are excluded from commercial crude stocks, also increased by about 1 million barrels.
By Zeynep Beyza Kilic
Anadolu Agency
energy@aa.com.tr