Oil prices steady on positive data, set for first weekly gain in five

Investing.com– Oil prices were flat in Asian trade on Friday, but were set for their first positive week in five as a mix of bargain buying, improving sentiment towards the U.S. economy and persistent geopolitical tensions boosted prices.

Mildly better-than-expected Chinese inflation data helped oil pare initial losses, given that it highlighted some improvements in the world’s biggest 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 readings battered crude prices over the past four weeks.

Traders were also seen attaching a greater risk premium to oil prices, after Ukraine mounted 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 kept some risk elements in oil.

fell 0.1% to $79.11 a barrel, while fell 0.1% to $74.99 a barrel by 21:35 ET (01:35 GMT). 

Chinese inflation improves mildly 

Chinese inflation grew more than expected in July, government data showed on Friday, while a decline in inflation was slightly less than expected.

The data highlighted some improving trends in the world’s biggest oil importer, especially after Beijing enacted a slew of interest rate cuts through July.

But inflation still remained largely languid, with a sustained decline in factory prices suggesting that a deflationary trend was still in play. 

China’s oil imports also shrank in July, data showed earlier this week. Fears of slowing demand in the country have been a major pain point for oil markets. 

Oil heads for first positive week in five

and WTI futures were trading up 1.8% and 3.2%, respectively, for the week. 

Initial gains in crude were fueled largely by bargain buying, after a rout on Monday put prices at seven-month lows.

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 data, released on Thursday, also spurred hopes that a labor market decline was not as dire as initially feared.