Crude Oil Stabilizes; Set To Record A Positive Week

Washington
Oil prices stabilized Friday after the previous session’s sharp gains, and are set to break a two-week losing streak on optimism about crude demand from Chinese refineries as well as a weaker dollar.
By 03:45 ET (07:45 GMT), U.S. crude futures traded 0.1% lower at $70.55 a barrel, while the Brent contract fell 0.1% to $75.61 a barrel. Both benchmarks soared 3%, the biggest jump in six weeks, on Thursday, putting them on course to register gains of around 1% this week, breaking a two-week losing run.
These gains came after data released Thursday showed that China’s oil refinery throughput in May rose 15.4% from a year earlier, its second highest total on record. China’s economic recovery from its COVID hit has been stuttering, but these numbers suggest that demand from the country’s refineries for crude remains strong.
Helping the tone was the news that China’s central bank has cut a couple of interest rates this week. This suggests that Beijing is determined to prop up the economy and thus more stimulus is likely to boost activity in the world’s largest importer of crude.
Adding to the week’s optimism has been weakness in the US Dollar Index, which fell overnight to a five-week low versus a basket of other currencies on the back of some disappointing U.S. economic data. The dollar is on track for its biggest weekly drop since January, making oil, which is denominated in dollars, cheaper for holders of other currencies.