©Reuters.
Investing.com — Oil prices hovered near two-month highs in Asian trade on Friday, up for the week on hopes that a stronger U.S. economy and more stimulus from China will boost demand in coming months. It was heading towards a new direction.
Oil prices each rose more than 3% on Thursday after data showed the U.S. economy, the world's biggest fuel consumer, continued to recover in the fourth quarter.
Thursday's rise was an extension of earlier price gains as China, the biggest oil importer, rolled out more financial stimulus and promised more steps to support slowing economic growth. be.
Positive signals from the world's two largest economies have raised hopes in some quarters that oil demand will rise significantly this year. There are also encouraging signs, with major oil industry bodies OPEC and the IEA predicting demand will improve in the coming years.
Persistent concerns about supply disruptions in the Middle East also supported oil prices. The Israel-Hamas war shows little sign of escalating, while US-led forces continue to clash with the Iranian-allied Houthis, who continue to attack ships in the Red Sea.
March-expiring crude oil prices fell 0.3% to $82.22 a barrel and fell 0.4% to $76.86 a barrel by 8:04 p.m. ET. .
Both contracts were close to their early December highs and were on track to rise 4.7% and 5.2%, respectively, in their best weeks since early October.
Further economic data from the US and China is awaited.
This week's gains helped oil prices recover from a tough start to 2024, but came amid growing concerns that prolonged U.S. interest rates and worsening economic conditions in China will dampen demand.
Those concerns remained ahead of further instructions from the world's largest economy in the coming days.
U.S. data, the Fed's preferred inflation measure, is expected to be released later on Friday and is expected to show once again that inflation will remain sticky in December. The resilience of the U.S. economy also gives the Fed more leeway to keep interest rates high for an extended period of time.
The Fed is widely expected to keep interest rates stable. Traders also consistently expect the central bank to begin cutting rates by March 2024 at the earliest.
Inventory figures released this week also showed that the cold snap in the United States is weighing on fuel demand. However, this idea was negated by production interruptions due to weather.
China is expected to release Purchasing Managers Index data for January next week. The focus is mainly on whether business activity will recover after the slump in 2023.
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