Oil prices steady on positive data, set for first weekly gain in five

Investing.com-- Oil prices were flat in Asian trade on Friday, but were set for their first positive week in five as a mix of bargain buying, improving sentiment towards the U.S. economy and persistent geopolitical tensions boosted prices.

Mildly better-than-expected Chinese inflation data helped oil pare initial losses, given that it highlighted some improvements in the world’s biggest oil importer. 

Oil prices rebounded from over seven-month lows this week, after concerns over a U.S. recession and a slew of weak Chinese readings battered crude prices over the past four weeks.

Traders were also seen attaching a greater risk premium to oil prices, after Ukraine mounted one of its biggest attacks on Russia since the war began in early-2022. Sustained tensions in the Middle East, amid fears of retaliation by Iran and Hamas against Israel, also kept some risk elements in oil.

Brent oil futures fell 0.1% to $79.11 a barrel, while West Texas Intermediate crude futures fell 0.1% to $74.99 a barrel by 21:35 ET (01:35 GMT). 

Chinese inflation improves mildly 

Chinese consumer price index inflation grew more than expected in July, government data showed on Friday, while a decline in producer price index inflation was slightly less than expected.

The data highlighted some improving trends in the world’s biggest oil importer, especially after Beijing enacted a slew of interest rate cuts through July.

But inflation still remained largely languid, with a sustained decline in factory prices suggesting that a deflationary trend was still in play. 

China’s oil imports also shrank in July, data showed earlier this week. Fears of slowing demand in the country have been a major pain point for oil markets. 

Oil heads for first positive week in five

Brent and WTI futures were trading up 1.8% and 3.2%, respectively, for the week. 

Initial gains in crude were fueled largely by bargain buying, after a rout on Monday put prices at seven-month lows.

But signs of sustained draws in U.S. inventories spurred hopes that demand in the country remained underpinned by the travel-heavy summer season, even as the pace of draws appeared to be slowing. 

Better-than-expected jobless claims data, released on Thursday, also spurred hopes that a labor market decline was not as dire as initially feared.