Mumbai, 18 May (Commoditiescontrol): Crude oil prices closed about 1% higher on Friday, with Brent crude recording its first weekly gain in three weeks, buoyed by positive economic indicators from the world’s two largest oil consumers, China and the U.S., which raised hopes for increased demand.
Brent crude settled up 71 cents, or 0.9%, at $83.98 a barrel, while U.S. West Texas Intermediate (WTI) crude rose by 83 cents, or 1.1%, to $80.06 a barrel. For the week, Brent gained approximately 1%, and WTI increased by 2%.
China's industrial output surged 6.7% year-on-year in April, indicating a recovery in its manufacturing sector and hinting at stronger future demand. In addition, China announced significant measures to stabilize its crisis-hit property sector, further supporting demand expectations.
In the U.S., economic indicators also pointed towards stronger demand. U.S. consumer prices rose less than expected in April, fueling expectations of lower interest rates. Lower U.S. interest rates could weaken the dollar, making dollar-denominated oil cheaper for international buyers.
Declining oil and refined product inventories at global trading hubs have also fostered optimism about demand. This decline in inventories reverses the trend of rising stockpiles that had previously exerted downward pressure on crude oil prices.
The U.S. oil rig count saw a slight increase this week, rising by one to 497, marking the first rise in four weeks, according to energy services firm Baker Hughes.
In other news, a fire erupted at Russia's Tuapse oil refinery following a series of Ukrainian drone attacks. The extent of the damage remains unclear, but such geopolitical tensions often influence market sentiments.
Additionally, money managers raised their net long U.S. crude futures and options positions in the week leading up to May 14, as reported by the U.S. Commodity Futures Trading Commission (CFTC).
Overall, the oil market responded positively to the combination of improved economic indicators from major economies and declines in global oil inventories, setting a hopeful tone for future demand and supporting the rise in crude oil prices.
(By Commoditiescontrol Bureau: 09820130172)
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