Oil set for weekly gain on renewed hopes for Chinese demand recovery
London — Oil prices held steady on Friday, poised to register a weekly gain as renewed optimism about China’s demand recovery overrode recession worries over growing US crude inventories and tightening monetary policy in Europe.
Brent crude futures edged up 4c, or 0.05%, to $84.79 a barrel by 0936 GMT. US West Texas Intermediate (WTI) crude futures were up 2c , or 0.03%, at $78.18.
Brent has risen by about 1.9% this week, while WTI is heading for a gain of 2.4%.
“Those betting on higher oil prices are basking in the afterglow of the positive macro data out of China,” said PVM analyst Stephen Brennock.
In China, activity in the services sector expanded at the fastest pace in six months in February as the removal of tough Covid-19 restrictions revived demand, a private sector survey showed on Friday.
Manufacturing activity in China also grew last month, at the fastest pace in more than a decade, reinforcing expectations of a fuel demand recovery. China’s seaborne imports of Russian oil are set to hit a record high this month.
The world’s top oil importer is becoming increasingly ambitious with its 2023 growth target, aiming as high as 6%, sources involved in policy discussions told Reuters this week.
The market broadly shrugged off a 10th consecutive week of crude stock builds in the US, as record exports of US crude kept the increase smaller than in recent weeks.
Russia’s plan to deepen oil export cuts in March also helped to buoy prices.
Meanwhile, analysts polled by Reuters expect the dollar to weaken in the next 12 months, which would make dollar-denominated oil cheaper for holders of other currencies.