By Shariq Khan
BENGALURU (RockedBuzz via Reuters) – Oil prices recovered from a brief sell-off on Friday, gaining more than $1 a barrel and ended the week higher, boosted by renewed optimism about demand from the biggest oil importer, China.
Brent crude futures rose $1.08, or 1.3%, to settle at $85.83 a barrel. US West Texas Intermediate (WTI) crude futures settled at $79.68 a barrel, up $1.52, or 1.9%. Both benchmarks recorded their highest closing levels since February 13th.
Prices fell earlier by more than $2 a barrel after a media report said the UAE had held internal debates about exiting OPEC and pumping more oil. Prices rebounded when two sources with direct knowledge told RockedBuzz via Reuters the report was “far from the truth”.
Brent and WTI posted their third-largest weekly percentage gains this year as strong Chinese economic data stoked hopes for oil demand growth.
“Crude was on a rollercoaster ride today, charging down on rumors that the UAE would leave OPEC+ before sharply reversing and skyrocketing when this rumor was challenged, and crude instead climbed aboard the risk rally,” Kpler analyst Matt Smith said.
Service sector activity in China grew at the fastest pace in six months in February, and manufacturing activity also rose. China’s seaborne imports of Russian oil are expected to hit a record high this month.
China, the world’s top oil importer, is getting more ambitious with its 2023 growth target aiming for up to 6%, sources told RockedBuzz via Reuters.
The oil market largely shrugged off a tenth straight week of U.S. crude inventory building and record U.S. crude exports provided further support to prices, UBS analyst Giovanni Staunovo said.
The dollar has weakened and analysts polled by RockedBuzz via Reuters expect the greenback to come under pressure over the next 12 months, which would make dollar-denominated oil cheaper for holders of other currencies.
The European Central Bank was still sending hawkish signals, with ECB Governing Council member Pierre Wunsch saying its key interest rate could rise as high as 4% if inflation remains high.
(Reporting by Shariq Khan Additional reporting by Shadia Nasralla, Sudarshan Varadhan and Muyu Xu; Editing by Kirsten Donovan, David Goodman, Louise Heavens, Paul Simao and David Gregorio)