Oil prices climbed in early Asian trade on Friday as sentiment was boosted by an expansion in factory activity in China, the world’s second-largest crude consumer, and as concerns grew about Middle Eastern supply.
U.S. West Texas Intermediate (WTI) crude rose 51 cents, or 0.69%, to $74.82, having gained about 8% this week. Brent futures, which have risen nearly 6% this week, were up 30 cents, or 0.38%, at $78.78 a barrel.
China’s manufacturing activity rose in March at a slower pace compared with a record-breaking expansion in February but still exceeded expectations by economists in a Reuters poll.
Industrial activity in China has become a key determinant of prices in recent weeks following its ending of coronavirus-related restrictions, amid weaker global demand.
Oil prices are set to cap a second straight week of gains after the largest bank failure after the 2008 financial crisis spooked traders and roiled markets. Worries about a full-blown global banking crisis have abated after two banks, in the U.S. and Europe, were rescued.
Prices rose more than 1% on Thursday due to lower U.S. crude stockpiles and a halt to exports from Iraq’s Kurdistan region, offsetting pressure from a smaller-than-expected cut to Russian supplies.
Producers have shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline. More outages are on the horizon.
The U.S. Energy Information Administration said U.S. crude oil stockpiles fell unexpectedly in the week to March 24 to a two-year low.
Markets are now waiting for U.S. spending and inflation data due on Friday and the resulting impact on the value of the U.S. dollar.