Oil prices experienced a boost on Friday, heading for a weekly gain, driven by positive demand data from the United States and China, coupled with ongoing uncertainties surrounding the Gaza conflict, which supported market sentiment.
Data released earlier in the week indicated an uptick in demand from both the U.S. and China, the world’s leading crude consumers. Notably, falling U.S. crude inventories, attributed to increased refinery operations, complemented reports showing higher oil imports by China in April compared to the previous year, signaling improving trade activities.
The absence of a resolution in the negotiations to cease hostilities between Israel and Hamas added to concerns over potential supply disruptions in the Middle East, further bolstering oil prices.
As of 0635 GMT, Brent futures saw a rise of 59 cents, or 0.7%, reaching $84.47 per barrel, poised for a weekly gain of 1.8%. Similarly, U.S. West Texas Intermediate crude climbed 65 cents, or 0.8%, to $79.91 per barrel, indicating a weekly increase of 2.3%.
China’s export and import figures rebounded in April after a contraction in the previous month, indicating a resurgence in demand and providing additional support to oil prices.
ANZ Research expressed optimism about the continued strength in demand from China, foreseeing robust support for commodity markets.
Meanwhile, tensions in the Middle East escalated as Israeli forces reportedly bombarded the city of Rafah in the Gaza Strip. The lack of progress in indirect negotiations between Israel and Hamas added to the geopolitical uncertainties influencing oil markets.
Overall, the combination of positive demand indicators from major economies and ongoing geopolitical tensions underscored the upward momentum in oil prices, with investors closely monitoring developments in the coming days.
