Oil prices edged ahead for a second session on Friday, buoyed by
stronger-than-expected U.S. economic growth and hopes of a rapid
recovery in Chinese demand as COVID-19 cases and deaths plunged
from last month’s peak levels, Trend reports with reference to Reuters.
Brent futures gained 30 cents, or 0.34%, to $87.77 a barrel by
0321 GMT, while U.S. crude rose 34 cents to $81.35 per barrel, a
0.42% gain. Both benchmarks had gained more than 1% on
Thursday.
“Oil might have trouble making any substantial moves to finish
the week as many traders will wait to see what happens with next
week’s two massive events; the OPEC+ virtual meeting on output and
the FOMC decision,” said Edward Moya, senior market analyst at
OANDA.
OPEC+ delegates will meet next week to review crude production
levels, amid steady support for crude prices from strong demand for
jet fuel and diesel. The U.S. Federal Reserve will decide on
another rate hike, as inflation cools and gross domestic product
improves.
Gains on U.S. crude were limited by a 4.2 million barrel build
in stocks at Cushing, the pricing hub for NYMEX oil futures,
earlier this week.
Still, oil markets were boosted by broad optimism on the first
day of the return of Chinese stock markets as China’s reopening
still plays a main role in boosting the demand outlook, said Tina
Teng, analyst at CMC Markets.
Critically ill COVID-19 cases in China are down 72% from a peak
early this month while daily deaths among COVID-19 patients in
hospitals have dropped 79% from their peak, pointing to a
normalisation of the Chinese economy and boosting expectations of a
recovery in oil demand.
“The short-term bullish factor is that the recent outage in the
U.S. refineries helped push up gasoline prices, though the U.S.
crude inventories hit a 16-month high,” Teng said.
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