Oil prices rose for a second session on Friday, buoyed by stronger than expected US economic growth, strong middle distillate refining margins and hopes of a rapid recovery in Chinese demand.
Brent futures gained $1.15, or 1.3 per cent, to $88.62 a barrel by 0930 GMT. US crude also rose by 1.3 per cent, gaining $1.01 to $82.02.
Both benchmarks advanced by more than 1 per cent on Thursday and are heading for a third straight week of gains.
OPEC+ delegates meet next week to review crude production levels, with sources from the oil producer group expecting no change to current output policy.
The US Federal Reserve’s next decision on interest rates will be made at meeting over Jan. 31 and Feb. 1 against a backdrop of a dip to inflation and gross domestic product that grew by a faster than expected 2.9 per cent in the fourth quarter.
“The positive batch of data gave oil prices a lift,” said PVM analyst Stephen Brennock.
Gains on US crude were capped by a 4.2 million barrel build in stocks at Cushing, the pricing hub for NYMEX oil futures, this week.
“We believe soaring middle-distillate prices and cracks are mostly behind crude’s bullish price action,” JPMorgan said in a note, pointing to heavy refinery maintenance and outages, plus the European ban on Russian refined products from Feb. 5.
In China, critically ill COVID-19 cases are down 72 per cent from a peak early this month while daily deaths among COVID-19 patients in hospitals have dropped by 79 per cent from their peak, pointing to a normalisation of the Chinese economy and boosting expectations of a recovery in oil demand.