By Shariq Khan
(Reuters) – Oil prices are set to rise for a second straight week despite a slight decline on Friday, as recent U.S. economic data fueled optimism about demand in the world’s largest oil consumer.
Brent crude futures rose about 1.3% this week, while U.S. West Texas Intermediate crude futures rose about 1.2%.
On Friday, Brent fell 22 cents, or 0.3%, to $80.82 a barrel by 06:50 GMT, while WTI fell 30 cents, or 0.4%, to $77.86.
US retail sales data released on Thursday beat analysts’ expectations. Independent data showed fewer Americans filed new claims for unemployment benefits last week, sparking renewed optimism about US economic growth.
“Crude oil pared recent losses as positive economic data and supply-side concerns boosted investor sentiment,” said analysts at ANZ Research.
Analysts at consultancy FGE said oil markets would now return their focus to geopolitics amid warnings of retaliatory strikes from Iran against Israel over the killing of a Hamas leader in Tehran.
A new round of negotiations began on Thursday to reach a ceasefire in the Gaza war, as Israeli troops continued their assault on the Palestinian enclave.
The talks, boycotted by Hamas, have been extended and will continue on Friday in the Qatari capital Doha.
To keep oil prices under control, Chinese refineries drastically reduced their crude processing rates last month due to weak demand for fuel.
The Organization of Petroleum Exporting Countries (OPEC) on Monday lowered its demand forecast for this year, citing lower expectations for China as the reason.
“Despite increased crude oil inventories last week, demand for gasoline and distillates remains strong. This does not appear to be the case in China, where oil demand fell 8% in July compared to the same period last year,” ANZ analysts said.
(Reporting by Shariq Khan in New York and Sudarshan Varadhan in Singapore; Editing by Sonali Paul, Kim Coghill and Jamie Freed)
