Oil prices head up after two weekly losses

Oil prices are heading to record a weekly rise today, Friday, after incurring losses for two consecutive weeks, amid optimism about the rise in energy demand in China, the largest importer of crude, and the weakness of the dollar.

By 0632 GMT, Brent crude futures rose 20 cents, or 0.3 percent, to $ 75.87 a barrel, while West Texas Intermediate crude futures rose 16 cents, or 0.2 percent, to $ 70.78 a barrel. The two benchmarks rose nearly 3 percent during the previous session

According to “Reuters”, data on Thursday showed that the production of oil refineries in China increased by 15.4 percent in May from a year ago, recording the second highest total level ever. The CEO of the Kuwait Petroleum Corporation said that the Chinese demand for oil is expected to continue to rise during the second half of the year.

In the US, data on Thursday showed that retail sales rose unexpectedly in May, and jobless claims increased more than expected last week. The dollar index fell to a five-week low against a basket of currencies

A weaker dollar makes oil cheaper for holders of other currencies, which could boost demand

Analysts also expect prices to be supported by voluntary crude production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies since May and by Saudi cuts in July.

However, market sentiment is clouded by a weak economic outlook, as China’s industrial output and retail sales growth missed expectations in May.

“Crude prices are looking for support while the global growth outlook still looks vulnerable to further shocks from rate hikes,” Edward Moya, an analyst at OANDA, said in a note.

The European Central Bank raised interest rates on Thursday to a 22-year high, as expected. The Federal Reserve this week signaled a new increase of at least half a percentage point by the end of the year.

Higher interest rates ultimately increase borrowing costs, which can slow economic growth and reduce demand for oil.