Feb 10 Reuters Oil prices edged lower on Friday but were set for a weekly gain with the market continuing to seesaw between fears of a recession hitting the United States and hopes for strong fuel demand recovery in China, the world39;s top oil importer.

Brent crude futures fell 13 cents, or 0.15, to 84.37 a barrel by 0721 GMT, while U.S. West Texas Intermediate WTI crude futures weakened 23 cents, or 0.29, to 77.83 a barrel.

The downturn was partly due to a report on Thursday showing the number of Americans claiming unemployment benefits increased more than expected last week, reigniting recession fears.

Sentiment overnight seemed to be tilted towards the downside after the jobless data in the U.S., said Baden Moore, National Australia Bank39;s head of commodity research. However I expect the China demand recovery will be more material to the price outlook into the second half of 2023.

An increase in China39;s consumer price index CPI for January compared with December, with inflation approaching the target of about 3 that the government set last year, added an air of caution for the oil market.

The rise in China39;s CPI in January reflected the consumption demand of residents before the Chinese New Year, but the data is not as good as expected, reflecting the slow recovery stage of the economy, said Leon Li, analyst at CMC Markets.

Therefore, oil prices will remain volatile at this stage.

The latest U.S. oil inventory data this week also raised fears about a…