Storage tanks are seen at Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB), gasoline, diesel fuel, and other petroleum products, in Carson, California, U.S., March 11, 2022
Storage tanks are seen at Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB), gasoline, diesel fuel, and other petroleum products, in Carson, California, U.S., March 11, 2022. Reuters / BING GUAN

Oil languished near its lowest since the start of the war in Ukraine on Friday on fears of a global recession, though stocks ignored such worries, gaining ahead of U.S. jobs data that will give another clue to the health of the world's largest economy.

Benchmark Brent crude futures were up a touch at $94.23 a barrel and U.S. crude futures were also a whisker higher at $88.70 a barrel, after both closed the previous session at their lowest levels since February.

Losses were partly due to data on Wednesday showing surge in U.S. inventories last week.

"It's a combination of the inventory data and a bit of worries about demand. Because the market is worried about growth more than inflation - even though inflation is still a major issue - the oil price has come down," said Prashant Bhayani, chief investment officer for Asia at BNP Paribas Wealth Management.

In another warning sign for the global economy, the closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes reached 39.2 basis points overnight, the deepest inversion since 2000.

An inverted curve is often viewed as portending a recession.

On Friday morning, 10-year yield was 2.6865% and the two-year yield 3.0509, leaving the gap between them at a still large 36.6 basis points.

"The bond market is saying there is a pretty high chance of recession, while the equity market is focused on the labour data, said Bhayani.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.74%, helped by gains from index heavyweight TSMC, which rose 1.8%, regaining ground it had lost earlier in the week due to U.S. House of Representatives Speaker Nancy Pelosi's visit to Taiwan.

Japan's Nikkei gained 0.43%.

U.S. employment data, due later in the day, is expected to show nonfarm payrolls increased by 250,000 jobs last month, after rising by 372,000 jobs in June.

"We're waiting to see a slowdown in the labour market, so if we get a large miss, it will finally confirm the labour market is slowing, and we'll see some more rallies in U.S. treasuries. If it's a beat people are going to say, 'oh well it will eventually miss'," said Bhayani.

In currency markets the dollar index, which measures the greenback against six major peers, was at 105.86, having fallen 0.6% overnight alongside falling U.S. yields.

Sterling was down a whisker at $1.2142 after taking a spin overnight as the Bank of England raised interested rates and warned a long recession was approaching Britain.

Spot gold was steady at $1,790 an ounce.

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