Crude futures steadied on Friday after strong U.S. retail sales data and more fiscal stimulus to boost China’s economy, but prices are still heading for their biggest weekly loss in more than a month.
Brent crude futures rose 26 cents, or 0.4%, to $74.71 a barrel by 0648 GMT, while WTI crude rose 29 cents, or 0.4%, to $70.96 a barrel.
Both contracts closed higher for the first time in five sessions on Thursday after data from the Energy Information Administration (EIA) showed U.S. crude, gasoline, and distillate inventories fell last week.
Brent and WTI are expected to fall about 6% this week. The decline would be their biggest weekly decline since September 2, after OPEC and the International Energy Agency (IEA) cut their global oil demand forecasts for 2024 and 2025 and concerns about a possible Israeli retaliatory strike on Iran eased.
Oil prices were lower on Friday but there were signs of near-term stability after the market factored in geopolitical risks last week.
The latest round of stronger-than-expected U.S. economic data provided further reassurance on growth risks, but market participants are also skeptical about a recovery in demand from China as recent stimulus kicks in.
U.S. retail sales rose slightly more than expected in September and investors are still pricing in a 92% chance of a Fed rate cut in November.
Meanwhile, China’s central bank launched two financing programs that will initially pump 800 billion yuan ($112.38 billion) into the stock market through newly created monetary policy tools.
This comes after the world’s largest oil importer saw slow economic growth in the third quarter, but September consumption and industrial production figures beat estimates.
China’s refinery output also fell for a third straight month as weak fuel consumption and refinery margins constrained processing.
Markets, however, are mindful of Middle East tensions and the killing of Hamas leader Yahya Sinwar could mark a new and escalating phase in the war against Israel.
Developments in the Middle East, geopolitical risks, supply disruptions and the resulting short-term movements in oil prices will continue to drive concerns.
