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Oil prices were headed early on Friday for a weekly gain of around 3%, pushed higher by signs of a rebounding U.S. economy, tight crude and product markets, and hopes of recovering Chinese oil demand.
On Friday morning in Europe, both benchmarks were down by around 1% as of 7:45 a.m. London time, but both were set for a weekly gain of between 3% and 4%.
In the middle of this week, oil jumped by more than 3% on Wednesday as data showed that U.S. crude oil and petroleum exports increased to a record last week, signaling an uptick in demand. The U.S. exported a record 5.13 million barrels per day (bpd) last week and refined product exports also grew, pushing total petroleum exports rising by nearly 2 million bpd from the previous week to a record 11.43 million bpd.
“Record US crude oil exports over the last week appear to have provided further support to oil prices,” strategists at ING said on Thursday.
A weaker U.S. dollar also boosted oil prices on Wednesday and Thursday as a falling greenback makes dollar-priced commodities cheaper for buyers holding other currencies.
Also on Thursday, oil prices extended Wednesday’s gains after a better-than-expected reading of the U.S. economy in the third quarter. Real GDP grew by 2.6% annually in the third quarter of 2022, in contrast to a decrease of 0.6% in the second quarter, according to the advance estimate of the Bureau of Economic Analysis.
In addition, “the market continues to worry about the availability and price of fuel products over the coming months when OPEC+ cuts production and the EU embargo on Russian crude and fuel imports start,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted in an analysis on Thursday.
Low stocks of diesel and heating oil in the northern hemisphere continue to raise concerns, Hansen said, noting that “As long the product market remains this tight the potential for lower crude oil prices seems low.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.