Oil up, notches weekly gain on improved demand outlook

*Oil production platform.

*Oil production platform.

16 July 2016, New York — Oil prices rose slightly on Friday, ending the week higher, after data from top energy consumers the United States and China boosted the oil demand outlook.

Crude prices touched session highs after data showed U.S. retail sales rose more than expected in June as Americans bought motor vehicles and a variety of other goods, reinforcing views of steady economic growth in the second quarter. Consumer prices also rose for a fourth straight month.

China’s economic growth, which came in at 6.7 percent in the second quarter versus a year ago, also bolstered the market.

“Macro numbers from China and the U.S., the world’s largest economies and biggest consumers of oil, have been improving in recent months and if the trend continues in the coming weeks then this should help to boost oil’s demand prospects,” said Fawad Razaqzada, technical analyst for Forex.com.

“I still think oil prices are more likely to head significantly higher than significantly lower from current levels in the next several months as the market is likely to tighten further.”

Brent crude futures closed up 24 cents, or 0.5 percent, at $47.61. It slipped as much as 1.5 percent earlier to a session low of $46.65 and rose as high as $48.05.

U.S. West Texas Intermediate (WTI) futures settled up 27 cents, or 0.6 percent, at $45.95 a barrel. The intraday low was $45.05 and it touched a high of $46.31 during the session.

Brent notched a weekly gain of nearly 2 percent and WTI about 1 percent after a volatile week. The market saw daily moves of almost 5 percent earlier this week as the market corrected from last week’s near 8-percent slump and reacted to bearish U.S. oil inventory data.

Concerns about a global glut in crude and refined products had weighed on oil earlier in the session.

“The high level of inventories remains a concern and will require a market deficit over an extended period to get it back to a more sustainable level,” ANZ analysts said in a note.

Data showing a third straight weekly build in the U.S. oil rig count had a little bearish impact on the market.

U.S. energy companies added six rigs drilling for oil during the week to July 15, bringing the total rig count up to 357, compared with 638 a year ago, industry firm Baker Hughes Inc said.

*Barani Krishnan & Devika Krishna Kumar; Ron Bousso Aaron Sheldrick; Editing – Chizu Nomiyama & Tom Brown – Reuters

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