Futures on US West Texas Intermediate Crude Oil looked set to register their first weekly gain in three, as market players were still weighing US recession risks against optimism over a sound fuel demand recovery in the world’s largest oil importer, China.
The latest data by the US Labor Department seemed to have reignited recession concerns. The number of Americans who filed for unemployment assistance rose by 13,000, more than expected, to the seasonally adjusted 196,000 in the week ended February 4th. This has been the first increase in claims since late December.
This week’s US oil inventory data also raised some concern of an economic slowdown, as crude stockpiles increased to levels unseen since June 2021.
“Sentiment overnight seemed to be tilted towards the downside after the jobless data in the U.S.,” Baden Moore, head of commodity research at National Australia Bank, was quoted as saying by Reuters.
“However I expect the China demand recovery will be more material to the price outlook into (the second half of) 2023.”
On the other hand, a market-supporting factor was Saudi Arabia’s decision to raise its official crude sales prices to Asia, an indication of an oil demand recovery in China.
“Refiners will likely boost run rates from March to meet domestic demand as well as export needs,” Emma Li, analyst at Vortexa, said.
As of 9:09 GMT on Friday WTI Crude Oil Futures were gaining 2.55% to trade at $80.05 per barrel.
WTI Crude Oil Futures have risen 9.33% so far this week, following a 7.82% loss in the prior week.
At the same time, Brent Oil Futures were gaining 2.52% on the day to trade at $86.63 per barrel.
Brent Oil Futures have risen 8.54% so far this week, following a 7.75% loss in the previous week.
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