Oil gains on easing fears of US recession

Oil prices rose on Friday as fears of an economic recession in the United States eased, but they are heading for a weekly decline of more than four percent after a jump in Covid-19 cases in China, the largest oil importer, which threatens to weaken demand for fuel. .

According to “Reuters”, Brent crude futures rose 23 cents, or 0.3 percent, to $93.80 a barrel by 0101 GMT, to continue to rise by 1.1 percent in the previous session.

US West Texas Intermediate crude futures rose 28 cents, or 0.3 percent, to $86.75 a barrel, after rising 0.8 percent in the previous session.

But since the beginning of the week, US crude has fallen more than six percent, while Brent has fallen about five percent

Analysts said that oil prices rebounded on Friday as the dollar fell after data on Thursday showed that US inflation was weaker than expected, limiting expectations of sharp interest rate hikes.

The weakness of the US dollar boosts the demand for oil because it makes it cheaper for buyers than holders of other currencies.

But locals said the risk China still posed to demand limited price gains, with COVID-19 cases rising in Guangzhou, the country’s manufacturing hub, as authorities asked residents to work from home.

Besides working from home, which reduces commuting and fuel demand, travel through China has remained weak, as residents fear being stuck in quarantine areas, ANZ Research analysts said in a note.

Hopes that China would ease the policy of non-proliferation of the Corona virus had led to the recovery of oil last week, but statements by health officials this week made it clear that they will continue to respond firmly to any outbreak.