Oil prices head for weekly gains on Chinese demand concerns

1 week ago

Oil prices rose in European trade on Friday for the second day on track to hit six-week highs and heading for the second weekly profit in a row on positive outlook for Chinese fuel demand.


Such data overcame earlier US data that showed an inventory buildup for the third week in a row, in a sign for negative demand in the US. 


Global Oil Prices


US crude rose 0.9% to $81.49 a barrel, while Brent added 1% to $87.08 a barrel, with a session-low at $86.18. 


US crude rose 2.2% on Thursday, resuming earlier gains after a short hiatus due to profit-taking off six-week highs from, $82.35. 


Brent rose 2.1% after a hiatus from gains off December 5 highs at $87.81. 


US global oil prices are up 2% this week on track for the second weekly profit in a row. 


Chinese Demand 


The International Energy Agency said that lifting Covid 19 restrictions in China is expected to increase global demand to record highs this year.


OPEC as well expect improving demand in China after easing Covid 19 restrictions. 


China's crude oil imports rose 4% y/y in December, with increased travel in the lunar new year bolstering outlook for transport fuel demand.


Analysts note that an increase in traffic in China is accompanying the easing of Covid 19 restrictions, in turn boosting demand on fuel and bolstering prices.


US Inventories 


The Energy Information Administration reported a buildup of 8.4 million barrels in US crude stocks to 488 million barrels.


Gasoline stocks rose 3.5 million barrels last week to 230.3 million barrels, while distillate stocks fell 1.9 million barrels to 115.8 million barrels.

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