Both oil benchmarks rallied on Friday, triggered by demand hopes among the world’s biggest oil consumers and supply concerns amid wildfires in Canada.
International benchmark Brent crude traded at $83.58 per barrel at 11.25 a.m. local time (0825 GMT), a rise of 0.37% from the closing price of $83.27 per barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $79.44 per barrel at the same time, a 0.27% increase from the previous session that closed at $79.23 per barrel.
Positive economic indicators in the US and China, the world’s biggest and second-largest oil consumers, respectively, aided price rises.
US commercial crude oil inventories decreased by 2.5 million barrels and gasoline inventories fell by approximately 200,000 barrels during the week ending May 10, according to the latest data from the Energy Information Administration (EIA).
The EIA inventories showed a stock decline that far exceeded market expectations and signaled increased demand in the country.
Furthermore, positive US economic data alleviated inflationary concerns. Analysts perceive that the less-than-expected increase in consumer prices in April indicates a slowdown in inflation at the beginning of the second quarter, while raising expectations of an interest rate cut in September.
An interest rate cut could boost economic activity, drive up oil demand and spur higher prices.
China, the world’s largest oil importer, announced plans to start issuing subsidized bonds worth 1 trillion yuan this week, which are geared toward accelerating its sluggish economy.
The latest data in China reveals a 1.5% increase in exports, within expectations, while imports exceeded expectations with a rise of 8.4%.
Analysts believe that China’s import figures indicate a rise, albeit slowly, in expenditure in the country.
Supply concerns continue to affect oil prices. Active forest fires in Canada, the world’s fourth-largest oil producer, started last weekend and are spreading to regions where Canada’s large oil fields are located.
Consequently, oil prices rose with the threat of the wildfires spreading, putting oil production in the country at risk and disrupting global supply.
