Feb 17 Reuters Oil prices were on track for weekly losses of 2.5 as strong U.S. economic data heightened concerns that the Federal Reserve would further tighten monetary policy to tackle inflation, a move that could hit fuel demand.

Brent crude futures dropped 96 cents, or 1.13, to 84.18 per barrel by 0744 GMT on Friday, while U.S. West Texas Intermediate WTI crude futures shed 97 cents, a 1.24 loss, to 77.52. Both benchmarks were headed for a weekly decline of more than 2.5.

Data showed that the U.S. producer price index PPI rose 0.7 in January, after declining 0.2 in December. Meanwhile, jobless claims unexpectedly fell to 194,000, compared to the 200,000 forecast, according to a Reuters poll.

Strong U.S. data bolstered concerns over rate hikes and prompted a rise in U.S. Treasury yields, which weighed on oil and other commodity prices, said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.

Tina Teng, an analyst at CMC Markets, said U.S. crude stockpiles rising to a 17month high suggested that demand was weakening, resulting in lower prices.

Crude oil prices were also lower due to riskoff trades following the selloff on Wall Street following the PPI data and a strong U.S. dollar, Teng said.

Oil prices have seesawed over the past weeks between fears of a recession hitting the United States amid inflationfighting rate hikes and hopes for a pickup in demand in China, the world39;s top oil importer.

The International Energy Agency IEA said this week…