Oil prices are holding on to positive data, set for the first weekly gain in five by Investing.com

Investing.com– Oil prices were flat in Asian trade on Friday but were set for their first positive week in five as a combination of bargain buying, improving sentiment toward the U.S. economy and lingering geopolitical tensions boosted prices.

Slightly better-than-expected Chinese inflation data helped oil par early losses as it highlighted some improvement in the world’s biggest oil importer.

Oil prices rebounded from more than seven-month lows this week after fears of a U.S. recession and a string of weak Chinese readings weighed on crude prices over the past four weeks.

Traders were also seen placing a higher risk premium on oil prices after Ukraine launched one of its biggest attacks on Russia since the start of the war in early 2022. Sustained tensions in the Middle East amid fears of retaliation by Iran and Hamas against Israel, also kept some elements of risk in oil.

It was down 0.1 percent at $79.11 a barrel, while it was down 0.1 percent at $74.99 a barrel by 9:35 p.m. ET (01:35 GMT).

Chinese inflation is improving slightly

Chinese inflation rose more than expected in July, government data showed on Friday, while a drop in inflation was slightly smaller than expected.

The data showed some improving trends in the world’s biggest oil importer, especially after Beijing adopted a series of interest rate cuts through July.

But inflation remained largely languid, with a sustained decline in factory prices, suggesting a deflationary trend is still at play.

China’s oil imports also fell in July, data showed earlier this week. Fears of slowing domestic demand have been a major pain point for oil markets.

Oil ends up for first positive week in five

and WTI futures traded up 1.8% and 3.2% respectively for the week.

Crude’s initial gains were fueled largely by bargain buying after Monday sent prices to seven-month lows.

But signs of sustained pullbacks in U.S. inventories boosted hopes that domestic demand would remain buoyed by the busy summer travel season, even as the pace of withdrawals appeared to be slowing.

Better-than-expected data released Thursday also boosted hopes that a labor market slump was not as bad as initially feared.