Investing.com– Oil prices moved little in Asian trade on Friday, but were headed for a mildly positive week as a softer dollar, shrinking U.S. inventories and increased Chinese stimulus stoked hopes of improving demand.
But crude markets were still grappling with mixed signals this week, after a major industry body lowered its demand forecast for the year. Persistent economic uncertainty over top importer China also sparked some volatility in oil markets, especially after Beijing was slapped with higher trade tariffs by the U.S.
Brent oil futures expiring in July rose 0.1% to $83.33 a barrel, while West Texas Intermediate crude futures steadied around $78.80 a barrel by 20:55 ET (00:55 GMT).
Oil set for mildly positive week after softer CPI, shrinking inventories
Brent and WTI futures were up between 0.7% and 1.4% this week, with a bulk of gains coming on Thursday after some U.S. consumer inflation readings read softer than expected.
The readings battered the dollar and pushed up bets that the Federal Reserve could begin trimming rates by as soon as September. Looser monetary conditions bode well for crude demand.
But this notion was somewhat offset by a string of Fed officials warning that the central bank needed more convincing that inflation was coming down, before it could begin trimming rates.
Oil markets see mixed cues on demand
Crude markets were also grappling with mixed cues on demand this week. A bigger-than-expected draw in U.S. inventories pushed up optimism over improving demand as the travel-heavy summer season approaches.
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But this was offset by the International Energy Agency slightly trimming its annual demand forecast, citing uncertainty over the global economy amid sticky inflation and potentially high for longer rates.
On the other hand, the Organization of Petroleum Exporting Countries maintained its demand forecast for 2024, citing an eventual economic recovery in China and potentially lower interest rates later in the year.
The OPEC is also expected to maintain its current pace of production cuts beyond end-June, presenting a tighter outlook for supply.
More China cues on tap
China said it will begin a massive, $1 trillion bond issuance this week- Beijing’s first major act of fiscal stimulus as it struggles to shore up a sluggish economic recovery.
Industrial production and retail sales data due later on Friday is now expected to offer more insight on the world’s biggest oil importer.
