Oil prices showed a limited increase on Friday due to strong US economic data and tensions between the US and China.
Brent crude futures LCOc1 rose 3 cents to settle at $43.34 a barrel. West Texas Intermediate (WTI) crude CLc1 futures rose 22 cents to settle at $41.29 a barrel.
During the week, Brent rose 0.5% and WTI crude rose 1.7%.
Prior to the weekend, market participants are cautious due to Tropical Storm Hanna, which is supposed to affect Baffin Bay 74 miles south of Texas Corpus Christi on Saturday afternoon or evening.
However, there has been no worker evacuation or discontinuation of production from offshore platforms in the northern Gulf of Mexico so far.
Economic data in Europe are much better than expected, which means that due to COVID-19, demand disruption in recent months has not been as bad as people thought.
On the other hand, commercial activity in the US rose to a six-month high in July. However, US companies are reporting a drop in new orders as new COVID-19 cases increase.
The pandemic, which has begun again, put the economic outlook of the USA inconvenient. Some states do restore restrictions that reduce fuel consumption.
The number of Americans applying for unemployment benefit rose to 1,416 million last week, and for the first time in about four months it grew unexpectedly.
Oil prices are encouraged if fuel demand improves in the U.S.
Some analysts previously reduced the oil market surplus forecast for 2020 from 3.5 million bpd to 2.5 million barrels per day (bpd).
According to data, the U.S. oil and gas rig count, as an indicator of future output, fell by two to an all-time low of 251 in the week to July 24.
China responded to the U.S.’s request to close China’s Houston consulate this week, ordering it to close its consulate in Chengdu, USA. The renewed tensions between the world’s two largest oil consumers have further raised concerns about fuel demand.
Smooth international trade relations are needed for oil demand to increase in the long run, and tensions between the US and China are never a good sign.