Oil prices increased more than 8% in the week ending Feb. 8, due to optimism about China's demand outlook this year, alleviating supply and inflationary concerns.
Brent crude was trading at $86.34 per barrel at 3 p.m. (1200 GMT) on Friday, posting an 8.5% rise from the Monday session that opened at $79.61 a barrel.
The American benchmark West Texas Intermediate (WTI) registered at $79.78 per barrel at the same time on Friday, increasing 8.6% relative to the opening price of $73.48 a barrel on Monday.
Prices began the week on a positive note following comments by International Energy Agency Chief Fatih Birol on China's demand outlook.
He said in an interview that the world's largest oil importer is expected to account for roughly half of the growth in global oil demand this year.
Nevertheless, supply concerns rose following two major earthquakes in Türkiye on Tuesday, supporting upward price movements. The Turkish Petroleum Pipeline Company (BOTAS) halted the flow of crude oil in the quake-hit region as a precautionary measure.
Inflation fears eased after US Federal Reserve Chair Jerome Powell stated that inflation was beginning to fall, putting prices on a positive trajectory by mid-week.
'The disinflationary process, the process of getting inflation down, has begun,' Powell said at an event at the Economic Club of Washington, D.C.
Market participants are anticipating the release of January US inflation data next week. The data will provide insight into the severity of the country's potential recession.
- EIA revises up oil price forecasts for this year
A larger-than-expected build in US crude stocks signaled a drop in oil demand, limiting further price increases.
US commercial crude oil inventories increased by 0.5% to 455.1 million barrels during the week ending Feb. 3.
Meanwhile, the US Energy Information Administration (EIA) slightly revised up its 2023 forecast for global crude oil prices, citing revisions to China's demand after relaxing COVID-19 restrictions.
In the February Short-Term Energy Outlook (STEO), the EIA revised up the price of Brent crude for 2023 to an average of $83.63 per barrel. In the report released in January, this figure was $83.10 per barrel.
The American benchmark, West Texas Intermediate (WTI), is expected to average $77.84 a barrel in 2023. In the report released in January, this figure was $77.18.
By Ebru Sengul Cevrioglu
Anadolu Agency
energy@aa.com.tr