NEW YORK, Jan 16 (NNN-XINHUA) – Oil prices, boosted by improved demand outlook in China, rose, bringing both the U.S. and the global crude benchmarks to gain more than eight percent for the week.
The West Texas Intermediate (WTI) for Feb delivery climbed 1.47 U.S. dollars, or 1.9 percent, to settle at 79.86 dollars a barrel, on the New York Mercantile Exchange. Brent crude for March delivery added 1.25 dollars, or 1.5 percent, to settle at 85.28 dollars a barrel, on the London ICE Futures Exchange.
For the week, the WTI rose 8.3 percent, while Brent gained 8.5 percent, based on the front-month contracts.
The rally came, as traders were bullish about the demand prospects in China, amid the country’s efforts to optimise its epidemic response.
“Oil is on an upward track as volume comes back,” partly driven by expectations of strong Chinese oil demand, Phil Flynn, senior energy analyst at The PRICE Futures Group, said.
“Everyone is looking at Chinese mobility indicators and they point upward, indicating recovering oil demand and supporting prices,” said UBS analyst, Giovanni Staunovo.
Analysts at Commerzbank Research also voiced their confidence, noting that, “oil prices look set to climb further as demand in China, the world’s second-largest market, is likely to revive.”
Bloomberg News reported that Chinese oil consumption is expected to hit a record this year, bolstering the global demand outlook and aiding prices.
Daily demand will climb by 800,000 barrels a day in 2023, according to the median estimate of 11 China-focused consultants, surveyed by Bloomberg News. That would take consumption to a record high of about 16 million barrels a day, the survey showed.
Providing additional support to oil markets was positive U.S. data released this week.
A preliminary survey of U.S. consumer sentiment index rose to 64.6 in Jan, hitting a multi-month high and up 8.2 percent from Dec’s reading of 59.7, the University of Michigan reported.
