Oil prices slipped in early trade on Friday but were on track for gains of more than 6% for the week on solid signs of demand growth in top crude-oil importer China and expectations of less aggressive interest rate rises in the United States.
Brent crude futures had fallen 33 cents, or 0.4%, to $83.70 a barrel by 0322 GMT, while U.S. West Texas Intermediate (WTI) crude futures slipped 20 cents, or 0.3%, to $78.19.
Brent has jumped 6.7% so far this week and WTI is up 6.2%, recouping most of last week’s losses. Analysts said recent Chinese crude purchases and a pick-up in road traffic fuelled confidence in 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.
“Given the focus on energy security, we anticipate that Chinese imports will continue to pick up, particularly as refinery runs ramp and stockpiling crude remains a strategic priority,” RBC commodity strategist Michael Tran said in a client note.
In another encouraging sign, ANZ analysts said a congestion index covering the 15 Chinese cities with the highest number of vehicle registrations had risen 31% from a week earlier.