Oil prices eased today but was heading for a second weekly gain as positive US economic growth and signs of Chinese stimulus boosted demand sentiment, while Middle East supply concerns added further support.
The US, the world's biggest oil consumer, registered faster than expected economic growth in the fourth quarter, data showed this week. Oil demand sentiment was also buoyed this week by China's latest measures to boost growth.
Brent crude futures were down 7 cents at $82.36 a barrel this afternoon, having set their highest price so far this year with an intra-day peak of $82.57 in the previous session.
US West Texas Intermediate crude was down 58 cents, or 0.8%, at $76.78.
"The economy remarkably weathered the storm caused by past rate rises and it remains ebullient at the beginning of 2024," Tamas Varga, of oil broker PVM, said of the US, adding that China's cut to the amount of cash reserves banks must hold was "another welcome development".
Brent crude and the US benchmark were set for weekly gains of more than 4%. Both were on track for their biggest weekly increase since the week ending October 13 after the start of the Israel-Hamas conflict in Gaza.
Prices dipped today on hopes that oil shipping disruptions in the Red Sea could ease after Chinese officials asked Iran to help rein in attacks on ships by the Iran-aligned Houthis or risk harming business relations with Beijing.
Still, previous interventions by US and UK forces in the Red Sea did not prevent attacks, leading investors to price in continued disruption, said Yeap Jun Rong, a market strategist at IG in Singapore.
Oil was also boosted this week by a larger than expected drawdown in US crude stockpiles and potential fuel supply disruption after a Ukrainian drone attack on an export-oriented oil refinery in southern Russia.
