Oil prices stable heading to record weekly gains

Oil prices stabilized today, Friday, on their way to recording weekly gains, as renewed optimism about the recovery of demand from China offset the impact of growing recession fears due to the increase in US crude inventories and tightening monetary policy in Europe.

By 0936 GMT, Brent crude futures rose four cents, or 0.05 percent, to $84.79 a barrel. US West Texas Intermediate crude futures increased by two years, or 0.03 percent, to $78.18 a barrel.

According to “Reuters”, Brent crude has risen about 1.9 percent since the beginning of the week, while West Texas Intermediate crude is heading up 2.4 percent.

Manufacturing activity in China grew last month at the fastest pace in more than a decade, boosting expectations of a recovery in the world’s second-largest economy after the lifting of strict anti-Covid-19 restrictions.

China’s seaborne imports of Russian oil are expected to hit a record high this month, with refineries (TADAWUL:2030) benefiting from lower prices.

Remarks by Atlanta Federal Reserve Chairman Rafael Bostick, in which he said the US central bank should continue to raise interest rates by a “steady” quarter-point increase, calmed concerns in the United States and helped support oil prices on Thursday after the strong unemployment data.

However, the market remains wary of a faster-than-expected rise in consumer prices in France, Spain and Germany, which reinforces expectations of further rate hikes by the European Central Bank.

Inflation in the euro zone rose to a higher-than-expected annual rate of 8.5% in February, according to a preliminary estimate from the European Union’s statistics agency.

Increases for the tenth consecutive week in crude oil inventories in the United States also pressured the market this week.