(Bloomberg) — Oil pulled back some of its weekly loss with markets advancing in the lead up to Federal Reserve Chair Jerome Powell’s Jackson Hole speech that will give clues about the path for US interest rates.

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Brent crude climbed near $78 a barrel, but was still down more than 2% on the week. Stock markets were also higher Friday before Powell’s speech amid speculation he may open the door for interest rate cuts.

Data this week showed US manufacturing contracting at the fastest pace this year, as well as signs of labor market softness. In Europe, meanwhile, futures for diesel — a workhorse industrial fuel — have retreated to the lowest level in 14 months.

Oil has shed all of its year-to-date gains as the impact of OPEC+ supply curbs has been overshadowed by a poor economic outlook in major economies, with China showing signs of weakness along with the US. While the cartel led by Saudi Arabia and Russia has said it aims to ease some output curbs in the fourth quarter, crude’s slide makes that plan more challenging.

“In the short term, Brent prices have declined ahead of fundamentals,” Morgan Stanley analysts including Martijn Rats said in a note, while paring price forecasts for upcoming quarters. “However, with demand set to slow after summer, and both OPEC and non-OPEC supply to increase from the fourth quarter, we foresee a softening balance, turning to surplus in 2025.”

In the Middle East, meanwhile, Israeli negotiators arrived in Cairo for talks aimed at cementing an agreement to pause the war in Gaza between Israel and Hamas, a step that could reduce tensions in the crude-producing region.

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