Oil prices were on the course for their most significant weekly growth since late August, with market sentiment buoyed by decreasing concerns over the Omicron COVID-19 variant’s influence on world economic growth and fuel demand.
The Brent and WTI benchmarks were both on the path for gains of nearly 7% this week. This was their first weekly boost in seven weeks, even behind a brief bout of profit-taking.
Brent crude futures increased 0.2%, or 11 cents, at $74.53 a barrel by 0927 GMT after falling 1.9% on Thursday.
U.S. West Texas Intermediate (WTI) crude futures climbed 27 cents, or 0.4%, to $71.21 behind sliding 2% in a volatile session the last day.
Earlier in the week, the oil market had recovered nearly half the losses suffered since the Omicron outbreak on Nov. 25, with prices increased by early studies indicating three doses of Pfizer (NYSE: PFE)’s coronavirus vaccine delivers protection versus the Omicron variant.
There are tighter travel restrictions and more fragile consumer confidence behind repeated small outbreaks. Therefore, price pressure is being applied by faltering domestic air traffic in China.
Meanwhile, rating agency Fitch downgraded property developers China Evergrande Group and Kaisa Group, claiming they had defaulted on offshore bonds.
Possible Slowdown in China
That reinforced worries of a possible slowdown in China’s property sector, as well as the broader economy of the world’s largest oil importer.
In expansion, headlines regarding a Japanese study conducting Omicron is more than four times as transmissible as the Delta variant also flared some selling, OANDA analyst Jeffrey Halley told.
According to Halley, oil’s had a tremendous run. It was a justification for some short-term money to lock in some profits.
A more powerful dollar, growing ahead of U.S. inflation data expected later on Friday, also weighed on oil prices. The oil usually drops when the dollar firms because it makes oil more costly for customers holding other currencies.