Oil prices rose nearly 1% on Friday, while global benchmark Brent crude recorded its first weekly gain in three weeks, after economic indicators from the world’s two largest oil consumers, China and the United States, supported hopes that demand would increase.
Brent rose 71 cents, or 0.9%, to settle at $83.98 a barrel. WTI rose 83 cents, or 1.1%, to $80.06.
Weekly, Brent gained nearly 1% while WTI rose 2%.
China’s industrial production rose 6.7% year-on-year in April as the recovery in the manufacturing sector gained momentum, possibly indicating stronger demand. China also announced that it will take important steps to stabilize the real estate sector affected by the crisis.
Chinese data shows potential for demand growth and supports oil prices. However, government data showing a decline in China’s annual refined product production may have offset this support.
Declines in oil and refined product inventories in global trading hubs also created optimism about demand, reversing the trend of rising inventories that had put heavy pressure on crude oil prices in previous weeks.
Baker Hughes said the number of oil rigs in the US increased for the first time in four weeks, rising by one this week to 497.
Latest US economic indicators fueled optimism about global oil demand. Wednesday’s data showed that US consumer prices rose less than expected in April, raising expectations that interest rates will fall.
Lower U.S. interest rates could help soften the dollar, making dollar-denominated oil cheaper for buyers holding other currencies.
Meanwhile, a fire broke out at Russia’s Tuapse oil refinery overnight following a wave of Ukrainian drone attacks. The extent of damage is unclear.
On the supply side, the majority of investors are looking for direction from the OPEC+ meeting to be held on June 1.
With the price of Brent crude oil hovering below $90, the level targeted by Saudi Arabia and others, the upcoming OPEC+ meeting will likely result in a postponement of current production cuts.
