Oil prices were flat on Friday, but were on track for their first positive week in five, bolstered by a mix of bargain buying, improving sentiment toward the U.S. economy, and persistent geopolitical tensions.
Mildly better-than-expected Chinese inflation data helped oil pare initial losses, as it indicated some improvements in the world’s largest oil importer.
Oil prices rebounded from over seven-month lows this week, after concerns over a U.S. recession and a slew of weak Chinese data had battered crude prices over the past four weeks.
Traders were also seen attaching a greater risk premium to oil prices, following Ukraine’s launch of one of its biggest attacks on Russia since the war began in early 2022. Sustained tensions in the Middle East, amid fears of retaliation by Iran and Hamas against Israel, also contributed to the risk premium.
Brent oil futures slipped 0.1 percent to $79.11 a barrel, while West Texas Intermediate crude futures fell 0.1 percent to $74.99 a barrel by 21:35 ET (01:35 GMT).
Chinese inflation shows mild improvement
Chinese consumer price index inflation grew more than expected in July, government data showed on Friday, while the decline in producer price index inflation was slightly less than anticipated.
However, inflation still remained largely sluggish, with a sustained decline in factory prices suggesting that a deflationary trend was still in play.
China’s oil imports also shrank in July, as per data released earlier this week. Fears of slowing demand in the country have been a major concern for oil markets.
Brent and WTI futures were trading up 1.8 percent and 3.2 percent, respectively, for the week.
Initial gains in crude were largely driven by bargain buying, after a rout on Monday had pushed prices to seven-month lows.
Read more: Oil prices inch higher amid tightening U.S. supplies, potential Middle East disruptions
Jobless claims data eases recession fears
But signs of sustained draws in U.S. inventories spurred hopes that demand in the country remained underpinned by the travel-heavy summer season, even as the pace of draws appeared to be slowing.
Better-than-expected jobless claims data, released on Thursday, also fueled hopes that a labor market decline was not as dire as initially feared.
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