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Oil at one-week high as China, US data signal rising demand

Oil prices

Brent futures gained 30 cents, or 0.4%, to settle at $83.88 a barrel, while US WTI crude added 27 cents, or 0.3%, to settle at $79.26

Oil prices edged up to a one-week high on Thursday on data from China and the US indicating demand in the world’s two biggest crude-consuming nations could surge.

Brent futures gained 30 cents, or 0.4%, to settle at $83.88 a barrel, while US WTI crude added 27 cents, or 0.3%, to settle at $79.26.

That was the highest close for both crude benchmarks since April 30.

Limiting those price gains was US energy data showing gasoline and diesel demand last week was the weakest since the 2020 Covid-19 pandemic.

Oil prices traded in a very tight range. There’s not a lot of oil news out there. The geopolitical news from the Middle East is in the background and it is unclear, Phil Flynn, an analyst at Price Futures Group, said of the small changes in crude prices.

In China meanwhile, crude oil imports increased on the previous year in April and exports and imports returned to growth last month, suggesting a rise in demand at home and overseas as Beijing moves to shore up a shaky economy.

The improved China trade balance data added to the upside momentum, according to Tina Teng, an independent market analyst.

In the US, the number of new claims for unemployment benefits increased last week to the highest in more than eight months, further evidence that the labour market was cooling.

Analysts projected that ebbing labour market momentum puts two interest rate cuts from the US Federal Reserve this year back on the table.

Lower rates would lower borrowing costs and could spur economic growth and demand for oil.

The BoE took another step toward reducing interest rates as a second official backed a cut and Governor Andrew Bailey said he was “optimistic that things are moving in the right direction”.

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