Oil swung in choppy trading on Friday after hawkish signals from a Federal Reserve official undercut a risk-on mood that has shown the potential to halt crude’s nearly two-month skid.

West Texas Intermediate traded little changed near US$71.60 a barrel in the afternoon. Gains early in the session gave way to a decline of as much as 1.8 per cent on New York Fed President John Williams comments that it’s too early for officials to think about cutting rates in March. The midday rebound puts crude on pace to snap a seven-week losing streak.

Crude had rallied the most in about a month on Thursday, propelled by broader risk-on sentiment after Chairman Jerome Powell indicated the central bank is turning its focus to when to cut borrowing costs as inflation continues to drop.

That nascent rebound came after seven straight weeks of declines that brought futures to the lowest since June. A surge in exports from non-OPEC countries, including the U.S., and concerns over weakening demand are pressuring prices, while market participants remain skeptical whether all OPEC members will adhere to the deeper voluntary cuts.

The International Energy Agency on Thursday added to the bearish outlook, slashing its estimates for global oil demand growth this quarter by almost 400,000 barrels a day as economic activity weakens. The Paris-based consumer organization continues to expect growth to almost halve next year, to about 1.1 million barrels a day.

Prices:

• WTI for January delivery was little changed at $71.55 a barrel at 1:14 p.m. in New York.
• Brent for February settlement inched up 0.2 per cent to $76.75 a barrel.