(London) Oil prices were up slightly on Friday on the prospect of a recovery in Chinese demand, also benefiting from the weakness of the dollar, even if fears of a global recession remain latent.
Around 6:30 a.m. (Eastern time), a barrel of Brent from the North Sea for delivery in March took 0.53% to 86.62 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in February, which is the last trading day, rose 0.88% to 81.04 dollars.
The prices of the two global benchmarks of black gold caught their breath after a sharp rise during the previous session, and are on track to achieve their second weekly gain in a row.
For Ricardo Evangelista, an analyst at ActivTrades, these gains are explained by hopes of a recovery in oil demand from China, the world’s largest importer of crude, which has abandoned the last vestiges of its strict zero-COVID-19 strategy. .
In view of the Chinese New Year festivities, air travel bookings jumped “reaching 50% of the 2019 level in the last week of the year”, according to the specialist firm ForwardKeys.
On Wednesday, the International Energy Agency (IEA) slightly raised its forecast for global oil demand in 2023 thanks to the Chinese recovery, in its monthly report. It should reach 101.7 million barrels per day (mb/d), an increase of 1.9 mb/d coming half from China, estimates the IEA.
“At the same time, expectations for the end of the Fed’s monetary policy tightening cycle (US Federal Reserve, editor’s note) continue to gain traction among investors, supporting a scenario of rising oil demand in United States”, continues the analyst.
The proliferation of signs of weakening US growth is indeed pushing investors to bet on a less aggressive Fed on the pace of its rate hikes, which is weighing on the greenback, the currency in which crude is traded.
A cheaper dollar makes oil purchases more attractive.
“For oil to maintain its upward trend, fears related to global demand must continue to fade,” warns Han Tan, an analyst at Exinity, however, recalling that fears of a global recession are not far away, and that major central banks may persist in raising demand-destroying policy rates.