Oil prices increased over 1% during the week ending Jan. 27, with strong economic data in US and demand optimism in China, the world’s largest crude importer.
Brent crude was trading at $88.63 per barrel at 1054 GMT on Friday, posting an 1.06% gain from the Monday session that opened at $87.70 a barrel.
American benchmark West Texas Intermediate (WTI) registered at $82.12 per barrel at the same time on Friday, increasing 1.09% relative to the opening price of $81.23 a barrel on Monday.
Strong growth of the US economy, decrease in recession concerns and the expectation of an increase in oil demand in China pushed prices higher.
The US economy expanded 2.9% in the fourth quarter of 2022, coming higher than the market estimate of 2.6%, according to the Commerce Department’s first reading released earlier.
The stronger-than-expected figure calmed fears that the Federal Reserve's rate hikes could cause a recession in the US economy this year.
In China, the critical COVID-19 cases fell by 72%, and the death rate in patients in hospitals fell by 79% compared to the beginning of the year. The sharo fall in cases increases the hopes for an economic rebound and a recovery in oil demand in the world’s second largest oil consuming country.
China decided to lift COVID-19 restrictions towards the end of last year and opened international borders for travel. The uptick in economic activity is expected to underpin oil demand as everyday life returns to pre-covid conditions.
The country expects about 2.1 billion domestic journeys to be made over a 40-day travel season that includes the weeklong Lunar New Year holidays which started on Jan. 21.
Meanwhile, on the supply side, market players are awaiting to see the effects of the EU ban on Russian refined products and OPEC+ meeting.
An EU embargo on Russian refined products will come into effect on Feb. 5 and is expected to limit output. Experts are cautiously waiting to see how prices will be affected once the ban starts.
Also, OPEC+ delegates are expected to meet in early February to discuss a review on output levels.
By Zeynep Beyza Kilic
Anadolu Agency
energy@aa.com.tr