Futures on US West Texas Intermediate Crude Oil looked set to register a solid weekly gain, supported by demand growth hopes in China and expectations of smaller interest rate hikes in the United States.
Recent crude purchases by world’s largest oil importer China and an increase in road traffic added to optimism over demand recovery after the Asian country reopened its borders and eased COVID-19-related restrictions.
“Given the focus on energy security, we anticipate that Chinese imports will continue to pick up, particularly as refinery runs ramp and stockpiling crude remains a strategic priority,” RBC commodity strategist Michael Tran wrote in an investor note, cited by Reuters.
Oil prices were also underpinned by a retreat in the US Dollar to lows unseen in almost nine months after the latest macro data set showed CPI inflation in the US had decreased for the first time in 2 1/2 years in December, as prices of gasoline and motor vehicles dropped.
US consumer prices went down 0.1% month-over-month in December, or the first drop since May 2020, after rising 0.1% in November. Food prices in the country rose at the smallest monthly pace since March 2021 last month, the data showed.
Fed officials welcomed the latest CPI data. Fed President for Philadelphia Patrick Harker said that, in his view, “hikes of 25 basis points will be appropriate going forward.”
As of 8:37 GMT on Friday WTI Crude Oil Futures were edging up 0.31% to trade at $78.63 per barrel. Yesterday the black liquid went up as high as $79.16 per barrel, which has been its strongest price level since January 3rd ($81.50 per barrel).
WTI Crude Oil Futures have risen 6.80% so far this week, following an 8.43% slump in the prior week.
At the same time, Brent Oil Futures were edging up 0.32% on the day to trade at $84.30 per barrel. Yesterday the commodity went up as high as $84.74 per barrel, which has been its strongest price level since January 3rd ($87.00 per barrel).
Brent Oil Futures have risen 7.19% so far this week, following an 8.54% drop in the previous week.