(MENAFN) In a welcome turn of events, oil prices surged on Friday, marking brent crude's inaugural weekly gain in three weeks. This uptick was fueled by promising economic indicators emanating from key oil consumers, notably China and the United States, hinting at a potential uptick in demand.
Brent crude saw a notable climb, settling up by 71 cents, translating to a 0.85 percent increase, ultimately reaching USD83.98 per barrel. Similarly, US West Texas Intermediate (WTI) crude experienced a commendable uptick, recording an increase of 83 cents, or 1.05 percent, reaching USD80.06 per barrel at settlement. Over the span of the week, Brent observed a roughly 1 percent rise, while WTI saw a more substantial 2 percent increase.
China, a pivotal player in global oil demand dynamics, showcased encouraging signs in its industrial output, registering a 6.7 percent year-on-year surge in April. Notably, the manufacturing sector exhibited an accelerated pace of recovery, hinting at potential future upticks in oil demand from the world's second-largest economy. Moreover, China's proactive measures to stabilize its real estate sector, deeply impacted by the crisis, further buoyed market sentiment.
Bob Yawger, the director of energy futures at Mizuho Corporation, underscored the significance of China's economic figures, highlighting their potential to drive up demand and subsequently bolster oil prices.
Optimism regarding demand was further fueled by a decline in oil and refined product inventories across global trade centers. This reduction instilled confidence in market players about the resilience of demand dynamics, despite lingering uncertainties.
However, amidst the optimism, the energy services company Baker Hughes presented a contrasting narrative. In its closely monitored report released on Friday, it revealed that American energy companies added oil and natural gas platforms for the first time in four weeks. This development, while indicating potential production upticks, added a layer of complexity to the market dynamics, signaling a nuanced outlook for oil prices in the near term.
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