Oil prices rose on Friday and are poised for a third week of gains as better-than-expected Chinese economic data and data on record oil consumption support the view that demand in the world’s second-largest crude oil consumer will continue to increase.
Brent crude futures were up 65 cents, or 0.7%, at $94.35 as of 0630 GMT, while West Texas Intermediate crude (WTI) was up 67 cents, or 0.7%, at $90.83.
Both indicators were up about 4% compared to a week ago.
China’s industrial production and retail sales rose faster than expected in August. The world’s second-largest economy appears to be stabilizing after months of uncertainty.
Data released by the National Bureau on Friday also showed that oil refinery operations rose to a record 64.69 million tonnes in August, equal to 15.23 million barrels per day (bpd), up 19.6% on the previous year.
Refining output increased as Chinese refiners kept operating rates high to meet summer travel demand and take advantage of increased margins for exports to Asian consumers.
Oil is becoming the favorite trade on Wall Street, with no one doubting that OPEC+’s decision late last month will keep the oil market very tight in the fourth quarter.
Record refining rates are being experienced in China as production cuts by major producers Russia and Saudi Arabia increase concerns about supply. Supply concerns have pushed both Brent and WTI to their highest level since November.
The International Energy Agency (IEA) said this week it expected extended oil production cuts by Saudi Arabia and Russia to lead to a market deficit in the fourth quarter.