Oil prices steady after precipitous declines due to weak U.S. demand

Oil prices stayed almost unchanged in early trading on Friday, after a loss of around 3 percent in the previous session due to deteriorating demand in the United States, the biggest oil consumer in the world, and a rise in output from Libya.

Brent oil prices rose 17 cents, or 0.2%, to $104.03 per barrel at 00:41 GMT, while U.S. West Texas Intermediate (WTI) crude futures were constant at $96.35 per barrel.

WTI has been hammered over the last two days as a result of the publication of data suggesting that U.S. gasoline consumption during the height of the summer driving season decreased by around 8% from the previous year due to record pump prices.

"At 8.52 million barrels per day, seasonal demand is at its lowest level since 2008," experts at ANZ Research said in a study.

The decrease in WTI has positioned the contract for a loss of 1.3% this week, its third consecutive weekly loss.

Brent was bolstered by signs of healthy demand in Asia, putting it on course for its first weekly gain in six weeks.

Despite increasing prices, gasoline and distillate fuel demand in India hit all-time highs in June, with refined product consumption 18 percent higher than a year earlier and Indian refineries operating at their busiest levels ever.

An analyst at RBC, Michael Tran, said in a note, "This signals much more than a solid return from COVID-affected years."

Brent's gains were limited this week by the return of production at important Libyan oil fields.

Meanwhile, the European Central Bank (ECB) raised rates more than expected on Thursday in an effort to curb inflation, with ECB President Christine Lagarde warning that inflation risks had increased due to the likelihood that the Ukraine conflict will continue for an extended period of time and that energy prices will remain elevated for an extended period of time.

"Is the horizon cloudy? Clearly it is, "Lagarde said.

She said that the baseline assumption of the central bank is that neither this year nor next would experience a recession.