U.S. crude oil on Friday closed out its best week in more than four months, as positive economic news in the world’s two largest economies raised hopes for more robust crude demand this year.
The West Texas Intermediate contract for March gained 65 cents, or 0.84%, to settle at $78.01 a barrel. The Brent contract for March settled at $83.55 a barrel, up $1.12 or 1.36%.
It’s been a bounce-back week for oil as it trades at the best levels since late November. This week’s US oil inventory report showed a counter-seasonal draw, though that was largely due to cold weather.
A report today said OPEC wouldn’t change production levels at next week’s monitoring meeting ,which isn’t a big surprise. However OPEC may see tightening global balances at the moment and feel a bit better about the picture. Moreover, signs of stimulus from China and strong US growth are tailwinds to consumption, particularly in aviation.
Eyes will be on whether oil can get back above $80, where oil topped out in mid-to-late November. Estimates for weekly oil inventories next week should start trickling in over the next few hours and that could jar oil into the close.
Houthi militants in Yemen have continued to target shipping in the Red Sea despite U.S. airstrikes. China has asked Iran to rein in the attacks by the Houthis or risk harming business with Beijing.
A suspected Ukrainian drone attack on Russian fuel terminal on the Baltic Sea last weekend also highlighted the ongoing geopolitical threats to fuel supplies.
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