Despite a decline in early Friday trade, oil prices were still expected to end the week up about 2% as a rebound in factory activity in China outweighed mounting worries about accumulating U.S. crude supplies and prospective European rate hikes. The price of Brent crude futures decreased by 39 cents, or 0.5%, to $84.36 a barrel. The price of West Texas Intermediate (WTI) crude in the United States fell 41 cents, or 0.5%, to $77.75 a barrel.
While WTI has increased by around 2%, recovering from a slight loss the previous week on expectations of robust growth in fuel consumption in China, the world’s top oil importer, Brent has risen by roughly 1.6% so far this week, on track for a second straight week of gains. The biggest growth in manufacturing activity in China in more than a decade was recorded last month, supporting hopes for a resurgence in gasoline demand. This month, the amount of oil imported by sea from Russia is expected to reach a new high.
Raphael Bostic, president of the Atlanta Federal Reserve, said that the Fed should maintain its “steady” quarter-point rate, allaying American fears and supporting oil prices on Thursday even in the face of positive unemployment figures. The market is still cautious, though, due to a quicker-than-anticipated increase in consumer prices in France, Spain, and Germany, which increased expectations of future interest rate increases by the European Central Bank (ECB).
