Brent crude oil fell below $ 117 per barrel on Friday and was heading for its first weekly loss in five after an unexpected drop in U.S. industrial production led to concerns economic activity has been slow to pick up.
Industrial production dipped 0.1 percent last month after a revised 0.4 percent gain in December and against forecasts of a slight increase, the Federal Reserve said.
Global growth prospects were also clouded by expected divisions at a meeting in Moscow of finance officials from the Group of 20 nations, 90 percent of the world’s economy, over economic policy and its impact on currencies.
Economists are worried that competitive devaluations could lead to currency wars, impoverishing nations worldwide.
Brent crude futures tumbled to a low of $ 116.28 per barrel, down $ 1.72, before recovering slightly to 1 percent lower below $ 117 per ounce. The contract was heading for its first weekly loss since the first half of January.
U.S. light, sweet crude last shed 1.7 percent to $ 95 per barrel.
Traders and strategists said commodities market had been hit hard by a series of economic figures suggesting the world economy would not expand as fast as anticipated.
“All commodities are selling off hard,” said Carsten Fritsch senior oil and commodities analyst at Commerzbank in Frankfurt. “This data is worse than most economists had been expecting.”
Data also showed the euro zone had slipped deeper into recession last quarter, with the steepest quarter-on-quarter drop since 2009, but other figures suggested the bloc might be starting to claw its way out of a slump and could see growth again by mid-year.
Worries over Iran’s nuclear program as well as other Middle East tensions kept a floor under oil prices.
Talks between Iran and the United Nations appear to have failed as its inspectors returned from talks in Tehran with no deal on reviving a nuclear investigation, no date for a new meeting and no signal of hope for big power diplomacy aimed at averting a war.
Concerns that the conflict could curb oil supply had eased slightly after the Middle Eastern nation appeared to be taking steps to slow the growth of stockpiles of nuclear materials that could be used to make a bomb.
Syria’s civil unrest continued to worsen, as did saber-rattling by Israel, adding to concerns about disruption of Middle Eastern supplies.
U.S. prices also found support from concerns that gasoline supplies may be reduced by refinery maintenance shutdowns, which pushed prices of the product as well as the oil complex higher.
Markets awaited a Thomson Reuters/University of Michigan survey of consumers at 1455 GMT for further pointers to the health of the U.S. economy.