Friday saw a little increase in oil prices as concerns about a U.S. recession subsided, however the market was still on track for weekly losses of more than 4% due to a rise in Covid-19 cases in China, the world’s largest importer of oil.
At 8:01 AM (Thai time), Brent crude futures rose 23 cents, or 0.3%, to $93.80 a barrel, adding to the 1.1% increase seen in the previous session.
Futures for U.S. West Texas Intermediate (WTI) crude increased by 28 cents, or 0.3%, to $86.75 per barrel. This follows a 0.8% increase in the prior session.
Oil prices rose on Friday as the U.S. dollar declined following the release of softer inflation data on Thursday, which dampened expectations of rate hikes and raised prospects of a smooth landing for the world’s largest economy.
Oil demand increases as the U.S. dollar declines because foreign buyers can purchase more oil at a lower effective exchange rate.
As Covid-19 cases have increased in the manufacturing hub of Guangzhou, where officials have advised citizens to work from home, analysts have cautioned that China continues to pose a problem on the demand side, capping price gains.
So far this week, WTI has fallen more than 6%, while Brent has dropped nearly 5%.