Oil prices declined Friday following weak data from China, spooking demand concern ahead of the release of US economic data. Data release will be used to gauge US Federal Reserve’s rate-hiking path, as well as a stronger dollar, which makes dollar-indexed crude more expensive for buyers.

International benchmark Brent crude traded at $78.58 per barrel, a 0.02% decrease from the closing price of $78.60 a barrel in the previous trading session. At the same time, American benchmark West Texas Intermediate (WTI) traded at $74.47 per barrel, a 0.13% rise after the previous session closed at $74.37 a barrel.

The number of Americans filing first-time unemployment claims increased by 7,000 last week, lower than market expectations but a precursor to data on core US personal consumption expenditures (PCE) due out later on Friday.

There is concern over the banking crisis and its spillover effects are also looming in the markets, following the sudden collapse of Silicon Valley Bank and Signature Bank.

This was supported by financial difficulties surrounding Silvergate Bank and First Republic Bank, which sparked turmoil in the world’s largest economy’s banking sector in recent weeks.

Fitch Ratings said Thursday in a statement that the recent turmoil in the US banking industry may cause tighter regulations for the nation’s larger banks.

‘The recent failures of Silicon Valley Bank and Signature Bank have ignited concerns regarding the prudential regulatory regime, highlighting the importance of interest rate risk management practices during an era of rising policy rates,’ the rating agency said in a statement.

Economic data released showed that Chinese industrial data released on Friday showed that expansion in China’s factory activity slowed in March.

China’s official manufacturing purchasing managers’ index (PMI) in March, an indicator of the economic health of the manufacturing sector, fell to 51.9 in March from 52.6 in February. The data raised negative oil market sentiment and discouraged crude oil purchases.

The rising value of the US dollar put additional pressure on dollar-indexed oil prices. As the value of the US dollar rises, importers are discouraged from purchasing higher-priced dollar-indexed crude oil, causing oil prices to fall.