Oil gains 1% on hopes of firmer demand

NEW YORK:

Oil prices rose about 1 percent on Friday, with global benchmark Brent crude posting its first weekly gain in three weeks, after economic indicators from the world’s top two oil consumers — China and the U.S. — supported hopes of stronger demand.

Brent settled 71 cents, or 0.9 percent, higher at $83.98 a barrel. U.S. West Texas Intermediate (WTI) crude gained 83 cents, or 1.1 percent, to $80.06. For the week, Brent gained about 1%, while WTI rose 2%.

China’s industrial output rose 6.7 percent from a year earlier in April as a recovery in its manufacturing sector picked up, pointing to a possible pick-up in demand. China also announced major steps to stabilize its crisis-hit real estate sector.

The Chinese figures showed the potential for demand building and supported oil prices, said Bob Yawger, director of energy futures at Mizuho. However, government data showing a decline in China’s annual refined output may have offset that support.

Declines in oil and refined product inventories at global trading centers also created optimism about demand, reversing the trend of rising inventories that had weighed heavily on crude oil prices in previous weeks.

The U.S. oil rig count rose by one this week to 497, the first increase in four weeks, energy services firm Baker Hughes said. Recent US economic indicators have fueled optimism about global oil demand.

Published in The Express Tribune, May 19^th2024.

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