By Nicole Jao
NEW YORK (Reuters) -Oil prices settled higher on Friday, with global benchmark Brent recording its first weekly gain in three weeks, as economic indicators from the world’s top two oil consumers – China and the United States – bolstered hopes for higher demand.
Brent crude oil settled 71 cents higher, or 0.85%, at $83.98 a barrel. U.S. West Texas Intermediate (WTI) crude gained 83 cents, or 1.05%, to $80.06.
For the week, Brent gained about 1%, while WTI rose 2%.
China’s industrial output rose 6.7% year-on-year in April as a recovery in its manufacturing sector gathered pace, pointing to possibly stronger demand to come. China also announced major steps to stabilise its crisis-hit property sector.
The Chinese figures showed potential for demand construction and supported oil prices, said Bob Yawger, director of energy futures at Mizuho. However, government data showing a drop in China’s annual refined output may have offset that support.
Declines in oil and refined product inventories at global trading hubs have also created optimism about demand, reversing a trend of rising stockpiles that had weighed heavily on crude oil prices in previous weeks. [EIA/S] [ARA/]
U.S. energy firms this week added oil and natural gas rigs for the first time in four weeks, energy services firm Baker Hughes said in its closely followed report on Friday.
The oil and gas rig count, an early indicator of future output, rose by one to 604 in the week to May 17.
Recent economic indicators from the United States have fed into the optimism over global demand for oil. U.S. consumer prices rose less than expected in April, data showed on Wednesday, boosting expectations of lower interest rates.
“Consumer prices were not as bad as expected,” said Tim Snyder, economist at Matador Economics. “It gave the U.S. a little bit of a boost.”
Lower U.S. interest rates could help soften the dollar, which would make oil cheaper for investors holding other currencies.
Meanwhile, a fire started at Russia’s Tuapse oil refinery overnight after a wave of Ukrainian drone attacks. The extent of the damage was unclear.
On the supply side, investors were mostly looking for direction from the upcoming OPEC+ meeting on June 1.
“With the price of Brent crude hovering below $90, a level quietly being targeted by Saudi Arabia and others, the upcoming OPEC+ meeting is likely to result in a rollover of current production cuts,” Saxo Bank analyst Ole Hansen said in a note.
(Reporting by Nicole Jao in New York, Robert Harvey and Alex Lawler in London; additional reporting by Deep Vakil in Bengaluru, Shariq Khan in New York and Trixie Yap in Singapore; editing by David Goodman, Susan Fenton, Deepa Babington and Bill Berkrot)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.