Oil prices score weekly rise of over 8 pct amid China demand hopes

NEW YORK, Jan. 13 (Xinhua) -- Oil prices, boosted by improved demand outlook in China, rose on Friday, bringing both the U.S. and the global crude benchmarks to gain more than 8 percent for the week.

The West Texas Intermediate (WTI) for February delivery climbed 1.47 U.S. dollars, or 1.9 percent, to settle at 79.86 dollars a barrel on the New York Mercantile Exchange. Brent crude for March delivery added 1.25 dollars, or 1.5 percent, to settle at 85.28 dollars a barrel on the London ICE Futures Exchange.

For the week, the WTI rose 8.3 percent, while Brent gained 8.5 percent, based on the front-month contracts.

The rally came as traders were bullish about the demand prospects in China amid the country's efforts to optimize its epidemic response.

"Oil is on an upward track as volume comes back," partly driven by expectations of strong Chinese oil demand, Phil Flynn, senior energy analyst at The PRICE Futures Group, said Friday in a note.

"Everyone is looking at Chinese mobility indicators and they point upward, indicating recovering oil demand and supporting prices," said UBS analyst Giovanni Staunovo.

Analysts at Commerzbank Research also voiced their confidence, noting that "oil prices look set to climb further as demand in China, the world's second-largest market, is likely to revive."

Bloomberg News reported that Chinese oil consumption is expected to hit a record this year, bolstering the global demand outlook and aiding prices.

Daily demand will climb by 800,000 barrels a day in 2023, according to the median estimate of 11 China-focused consultants surveyed by Bloomberg News. That would take consumption to a record high of about 16 million barrels a day, the survey showed.

Providing additional support to oil markets was positive U.S. data released this week.

A preliminary survey of U.S. consumer sentiment index rose to 64.6 in January, hitting a multi-month high and up 8.2 percent from December's reading of 59.7, the University of Michigan reported on Friday.

Meanwhile, Thursday's U.S. consumer price index for December pointed to cooling U.S. inflation, firming up expectations that the Federal Reserve will slow the pace of its interest rate hikes.