Investing
Oil heads for second week of gains on China demand outlook
Published by Jessica Weisman-Pitts
Posted on January 20, 2023
2 min readLast updated: February 2, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on January 20, 2023
2 min readLast updated: February 2, 2026
By Noah Browning
LONDON (Reuters) -Oil rose on Friday and was heading for a second straight weekly gain, spurred largely by brightening economic prospects for China and resulting expectations of a boost to fuel demand in the world’s second-biggest economy.
The lifting of COVID-19 restrictions in China is set to increase global demand to a record high this year, the International Energy Agency (IEA) said on Wednesday, a day after OPEC also forecast a Chinese demand rebound in 2023.
Brent crude gained 47 cents, or 0.6%, to $86.63 a barrel by 1431 GMT. U.S. crude advanced 39 cents, or 0.5%, to $80.72.
“Many traders believe it is highly likely that we are going to see higher demand coming from China as it continues to dismantle its COVID policies,” said Naeem Aslam, analyst at broker Avatrade.
For the week, Brent was heading for a gain of about 1.2% and the U.S. benchmark for a 0.8% rise.
Oil was also supported by hopes that the U.S. central bank will soon downshift to smaller rises in interest rates and by hopes for the U.S. economic outlook.
A Reuters poll predicted that the U.S. Federal Reserve will end its tightening cycle after increases of 25 basis points at each of its next two policy meetings and is then likely to hold rates steady for at least the rest of the year.
The chances of a “soft landing” for the U.S. economy appear to be growing, Federal Reserve Vice Chair Lael Brainard said on Thursday. The Fed’s next rate-setting meeting is over Jan. 31 to Feb. 1.
The two largest economies in the world need more crude, said Edward Moya, senior market analyst at OANDA.
“The oil market has been down on global recession fears, but it is still showing signs it can remain tight a little while longer,” he said.
Oil rose despite U.S. inventory figures this week showing crude stockpiles rose by 8.4 million barrels in the week to Jan. 13 to about 448 million barrels, the highest since June 2021.
(Reporting by Alex Lawler; additional reporting by Sudarshan Varadhan and Arathy Somasekhar; editing by David Goodman, Jason Neely and Louise Heavens)
Brent crude is a major trading classification of crude oil originating from the North Sea. It serves as a benchmark for oil prices globally and is used to price two-thirds of the world's crude oil.
OPEC, or the Organization of the Petroleum Exporting Countries, is a group of oil-producing countries that coordinates and unifies petroleum policies among member countries to ensure stable oil markets.
Interest rates represent the cost of borrowing money or the return on savings, expressed as a percentage of the principal amount. They are influenced by central bank policies and economic conditions.
Fuel demand refers to the quantity of fuel that consumers and industries require for energy production, transportation, and other uses. It is influenced by economic activity, prices, and seasonal factors.
The Federal Reserve, often referred to as the Fed, is the central bank of the United States. It regulates the U.S. monetary and financial system, including setting interest rates and controlling money supply.
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