Oil prices settled about 1% higher on Friday, with global benchmark Brent crude recording its first weekly gain in three weeks. The price increase was driven by positive economic indicators from the world’s top two oil consumers, China and the United States, which bolstered hopes for higher demand.
Brent crude LCOc1 settled 71 cents higher, or 0.9%, at $83.98 a barrel, while U.S. West Texas Intermediate crude (WTI) CLc1 gained 83 cents, or 1.1%, 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, indicating a recovery in its manufacturing sector and potentially stronger demand for oil. The Chinese government also announced major steps to stabilize its crisis-hit property sector, further supporting oil prices.
The U.S. also contributed to the optimism, with recent economic indicators such as lower-than-expected consumer price increases in April, which raised expectations of lower interest rates. Lower U.S. interest rates could help weaken the dollar, making oil cheaper for buyers holding other currencies.
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 previously weighed heavily on crude oil prices.
On the supply side, investors were mostly looking for direction from the upcoming OPEC+ meeting on June 1, where a rollover of current production cuts is likely, according to Saxo Bank analyst Ole Hansen.