Oil prices are on track for a second consecutive week of gains, despite experiencing a slight dip on Friday. Brent crude futures have risen by approximately 1.3% this week, while U.S. West Texas Intermediate (WTI) crude futures have increased by around 1.2%.
On Friday, Brent crude fell by 22 cents, or 0.3%, settling at $80.82 per barrel by 0650 GMT. WTI dropped 30 cents, or 0.4%, to $77.86.
Recent U.S. economic data have bolstered optimism about demand from the world’s largest oil consumer. U.S. retail sales data released on Thursday exceeded analysts’ expectations, and a decrease in new unemployment benefit claims has further fueled optimism about U.S. economic growth.
“Crude oil reversed recent losses as positive economic data and supply-side concerns improved investor sentiment,” noted analysts at ANZ Research.
Consultancy FGE indicated that oil markets would now shift their focus to geopolitical developments, particularly amid warnings of potential retaliatory actions from Iran against Israel following the killing of a Hamas leader in Tehran.
New negotiations aimed at securing a ceasefire in the Gaza conflict commenced on Thursday, though Hamas has boycotted the talks. These negotiations have been extended and are set to resume in Doha, Qatar, on Friday.
Meanwhile, Chinese refineries reduced crude processing rates significantly last month due to sluggish fuel demand. The Organization of the Petroleum Exporting Countries (OPEC) adjusted its demand forecast for this year downward, attributing the change to weaker expectations for China.
“Despite a rise in crude oil inventories last week, gasoline and distillate demand remains robust. However, this trend is not mirrored in China, where apparent oil demand fell by 8% year-on-year in July,” ANZ analysts commented.
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