Oil heads for weekly losses waiting for signs of recovery in ‎China

Oil prices achieved modest gains in early trading today, Friday, but are set to incur losses for the second week in a row, as the market searches for more indications of a strong recovery in fuel demand in China to offset the impact of the looming recession in other major economies. ,

By 0110 GMT, Brent crude futures rose 16 cents, or 0.2 percent, to $82.33 a barrel, while West Texas Intermediate crude futures rose 18 cents, or 0.2 percent, to $76.06 a barrel.

According to Reuters, since the beginning of the week, Brent crude has fallen 4.8 percent, after a loss of 1.1 percent in the previous week. West Texas Intermediate crude fell 4.5 percent, after falling 2 percent in the previous week

Analysts at ANZ noted a big jump in traffic in China’s 15 largest cities after the Lunar New Year holiday, but also noted that Chinese traders were “relatively absent” from the markets.

The prospect of an economic recovery in China after the easing of COVID-19 restrictions has boosted the oil market since the beginning of the year, along with a weaker dollar that makes oil cheaper for those holding other currencies.

The dollar fell due to the Federal Reserve (the US central bank) not expecting sharp increases in interest rates anymore, while other major economies continue to raise interest rates despite the receding inflation.

While oil’s gains were supported by a weak dollar, they are limited by the prospect of slowing growth in the United States, the world’s largest oil consumer, and stagnation in places such as Britain, Europe, Japan and Canada.

“The crude oil demand outlook needs a clear indication that the reopening in China will be smooth, and that the US economic growth momentum will not deteriorate quickly,” Edward Moya, an analyst at OANDA, said in a note.