Oil prices surge

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NEW YORK- Oil prices settled more than a dollar a barrel higher on Friday, notching their biggest weekly gains since October, as the US dollar dropped to a seven-month low and more indicators pointed toward growing demand from top oil importer China.

Brent crude futures settled at $85.28 a barrel, up by $1.25, or 1.5 percent. West Texas Intermediate (WTI) crude futures rose for the seventh-straight session to settle at $79.86 a barrel, up by $1.47, or 1.9 percent.

Brent gained 8.6 percent this week, while WTI rose by 8.4 percent, recouping most of the previous week’s losses.

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The US dollar index slumped to the lowest in more than seven months, a day after data showed inflation fell in December for the first time in 2-1/2 years, feeding hopes the Federal Reserve would slow its rate hikes.

A weaker greenback tends to boost demand for oil, making it cheaper for buyers holding other currencies.

Recent Chinese crude purchases and a pick-up in road traffic in the country are also fueling hopes of a demand recovery in the world’s second-largest economy following the reopening of its borders and easing of COVID-19 curbs after protests last year.

“Everyone is looking at Chinese mobility indicators and they point upward, indicating recovering oil demand and supporting prices,” said UBS analyst Giovanni Staunovo.

“Next thing to watch is if this translates also into higher Chinese crude imports and if energy agencies (IEA, OPEC) revise upwards their (first quarter) demand estimates,” Staunovo said. – Reuters

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