Oil prices surge on positive economic indicators

Oil prices saw an uptick on Friday as global demand showed signs of improvement, buoyed by positive economic indicators from key consumers China and the US. Brent crude oil prices edged up by 0.25 percent to $83.48 a barrel, while US West Texas Intermediate crude futures also climbed by 0.09 percent to $79.30 a barrel.

For the week, Brent futures are poised to increase by about 1 percent, with WTI futures expected to gain 1.4 percent. Market experts believe that WTI crude oil prices have found stability around $78.40/barrel following a recent dip, supported by factors such as dwindling US crude oil inventories and potential stimulus measures from China.

China's industrial output growth of 6.7 percent in April, coupled with decreasing oil and refined products stockpiles at major global trading hubs, have added to the positive sentiment surrounding oil demand growth.

In the US, recent economic data, including lower-than-anticipated consumer price hikes and a steady job market, have reinforced expectations of reduced interest rates. The prospect of lower interest rates could potentially weaken the US dollar, making oil more accessible for investors using other currencies.

Investors are eagerly anticipating the upcoming OPEC+ meeting scheduled for June 1, where discussions on extending oil output cuts beyond June will be held. Analysts foresee a gradual easing of the cuts in the latter half of 2024, potentially leading to a market deficit as future demand for OPEC production outstrips current output levels.

The positive momentum in oil prices driven by improving global demand and economic indicators reflects a promising outlook for the oil market. With key factors like China's industrial growth, US economic data, and upcoming OPEC+ discussions shaping the market dynamics, investors are closely monitoring developments for potential opportunities in the oil sector.