Oil prices gained on Friday, with global benchmark Brent set for its first weekly increase in three weeks, driven by signs of improving global demand amid stronger economic indicators from key consumers China and the United States.
As of 0314 GMT, Brent crude oil prices climbed 21 cents, or 0.25%, reaching $83.48 a barrel. Similarly, U.S. West Texas Intermediate (WTI) crude futures rose 7 cents, or 0.09%, to $79.30 a barrel. On a weekly basis, Brent futures are poised to rise about 1%, while WTI futures are expected to gain 1.4%.
“WTI crude oil prices seem to have found a near-term floor/support at around US$78.40/barrel after a 9%+ decline from 26 April in the past week due to several encouraging factors such as two consecutive weeks of decline in U.S. crude oil stockpile and more upcoming ‘piecemeal’ stimulus measures from China,” said Kelvin Wong, senior market analyst at OANDA. He referred to China’s potential programme to buy up unsold homes directly from property developers as a positive signal for the market.
Markets were further bolstered by China’s industrial output growth, which rose 6.7% year-on-year in April, indicating a recovery in its manufacturing sector and pointing to potentially stronger demand ahead. Additionally, declines in oil and refined products inventories at major global trading hubs have created optimism regarding oil demand growth.
This renewed optimism is underpinned by economic data from both China and the U.S., which are significant consumers of crude oil. The recent economic indicators suggest a robust demand trajectory, contributing to the upward momentum in oil prices.
Overall, the combination of declining inventories, potential stimulus measures, and solid industrial growth figures from China have led to a more favorable outlook for the oil market, as reflected in the recent price increases.
