Oil rises above two-month high, set for second weekly gain

Oil prices extended gains on Friday, after closing at their highest in more than two months in the previous session, on hopes that governments around the world will increase policy support to stimulate economic growth that is boosting fuel demand.

Brent crude futures were up 16 cents, or 0.2%, at $76.09 a barrel by 0132 GMT, after closing at their highest since Oct. 25 on Thursday.

U.S. West Texas Intermediate crude was at $73.32 a barrel, up 19 cents, or 0.3%. Thursday’s close was the highest for U.S. crude since Oct. 14. Both benchmarks were set for their second weekly gain as investors returned from holidays.

Factory activity in Asia, Europe and the United States ended 2024 on a weak note amid gloomy expectations for the new year amid heightened trade risks from Donald Trump’s second presidency and China’s fragile economic recovery.

“December PMIs in Asia were mixed, but we continue to expect manufacturing activity and GDP growth in the region to remain weak in the near term,” analysts at Capital Economics said in a note. “With growth slowing and inflation remaining below target in most countries, we believe central banks in Asia will continue to ease policy,” they added. Lower interest rates are expected to spur further economic growth, which could lead to increased fuel consumption.