Oil prices declined in early Friday trading but are set to close the week on an upward trend, thanks to positive economic data from the United States and China and a decrease in American crude inventories.
The futures contracts for Brent crude fell by 32 cents or 0.39% to $82.12 a barrel by 0115 GMT, while the US benchmark West Texas Intermediate (WTI) crude dropped by 41 cents or 0.5% to $76.95.
Brent crude is set to finish the week with a 4.5% increase, while the US benchmark crude is poised to achieve a 4.8% weekly gain. According to Reuters, both crude oil types are heading for a second consecutive week of gains.
Sources said that Chinese officials have asked their Iranian counterparts for assistance in curbing the Houthi attacks, as the Houthis are allied with Tehran, on ships in the Red Sea. They warned that if Iran does not help, Beijing’s trade relations will be damaged. This step has helped alleviate concerns about possible supply disruptions.
This week, prices received support from a larger-than-expected decline in US crude inventories, along with strong economic data from the United States and China, and concerns over supply disruption following a Ukrainian drone attack on an oil refinery in southern Russia.
On Wednesday, the Energy Information Administration announced that US crude oil inventories decreased by 9.2 million barrels due to the impact of winter weather on crude production.
On the demand side, data showed that the US economy grew more than expected in the fourth quarter, and China announced a significant reduction in reserve requirements for banks in order to stimulate growth.
