Oil prices slip on profit-taking, but head for strong weekly gain

Oil prices drifted down on Friday as traders locked in profits from a strong run-up this week, stoked by growing confidence that the rapid spread of the Omicron coronavirus variant would not hit global growth and fuel demand.

Benchmark Brent and WTI were both on course to rise more than 6% this week, even after the profit-taking, their first weekly gain in seven weeks.

U.S. West Texas Intermediate (WTI) crude futures fell 7 cents, or 0.1%, to $70.87 a barrel at 0150 GMT, after sliding 2% in a volatile session the previous day.

Brent crude futures slipped 4 cents to $74.38 a barrel after falling 1.9% on Thursday.

Earlier in the week, the oil market had recovered around half the losses it suffered since the Omicron outbreak on Nov. 25, however sellers came in overnight after ratings agency Fitch downgraded property developers China Evergrande Group and Kaisa Group, saying they had defaulted on offshore bonds.

That reinforced fears of a potential slowdown in China`s property sector, as well as the broader economy of the world`s biggest oil importer.

In addition, headlines about a Japanese study showing Omicron is more than four times as transmissible as the Delta variant also sparked some selling, OANDA analyst Jeffrey Halley said.

"Oil`s had a massive run - it was an excuse for some of the short-term money to lock in some profits," Halley said.

A stronger dollar, rising ahead of U.S. inflation data due later on Friday, also weighed on oil prices. Oil typically falls when the dollar firms as it makes oil more expensive for those holding other currencies.

The inflation figures are expected to lead to a push for a U.S. rate hike as early as March 2022.