Oil prices rose on Friday and are set for a third weekly gain, as better-than-expected Chinese economic data and reports of record oil consumption bolstered the view that demand in the world’s second-largest crude consumer will continue to surge.
Brent crude futures rose 62 cents, or 0.7%, to $94.32 as of 0249 GMT, while the U.S. West Texas Intermediate crude (WTI) was up 71 cents, or 0.8%, at $90.87.
Both benchmarks were up about 4% from a week ago.
China’s industrial output and retail sales grew at a faster-than-expected rate in August, suggesting that the recovery of the world’s second-largest economy from the COVID-19 pandemic is stabilising.
Data from the National Bureau released on Friday also showed oil refinery processing rose to a record 64.69 million tonnes in August, up 19.6% from a year earlier and equal to 15.23 million barrels per day (bpd).
Refining throughput surged as Chinese processors kept run rates high to meet summer travel demand and capitalise on strengthening margins for exporting to Asian consumers.
“Betting on oil is becoming a favourite trade on Wall Street. No one is doubting the OPEC+ (oil-producing nations) decision at the end of last month will keep the oil market very tight in the fourth quarter,” said analyst Edward Moya at OANDA.
The record China refining rates are occurring as output cuts by major producers Russia and Saudi Arabia are increasing worries about supply. The supply concerns have pushed both Brent and WTI to their highest since November.
The International Energy Agency said this week it expects Saudi Arabia’s and Russia’s extended oil output cuts to result in a market deficit through the fourth quarter.
(Reporting by Sudarshan Varadhan; Editing by Christopher Cushing and Christian Schmollinger)