Oil prices rose for a second session on Jan. 27, buoyed by better than expected U.S. economic growth, strong middle distillate refining margins and hopes of a rapid recovery in Chinese demand.
Brent futures gained $1.17, or 1.34%, to trade at $88.64 a barrel by 13:32 GMT. U.S. crude was up $1.17, or 1.44%, at $82.18 and on track for its highest daily jump in percentage terms for two weeks.
Both benchmarks advanced by more than 1% on Jan. 26 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 U.S. 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% in the fourth quarter.
"The positive batch of data gave oil prices a lift," said PVM analyst Stephen Brennock.
Gains on U.S. crude were capped by a 4.2 MMbbl 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% from a peak early this month while daily deaths among COVID-19 patients in hospitals have dropped by 79% from their peak, pointing to a normalization of the Chinese economy and boosting expectations of a recovery in oil demand.
Recommended Reading
Range Resources Holds Production Steady in 1Q 2024
2024-04-24 - NGLs are providing a boost for Range Resources as the company waits for natural gas demand to rebound.
Hess Midstream Increases Class A Distribution
2024-04-24 - Hess Midstream has increased its quarterly distribution per Class A share by approximately 45% since the first quarter of 2021.
Baker Hughes Awarded Saudi Pipeline Technology Contract
2024-04-23 - Baker Hughes will supply centrifugal compressors for Saudi Arabia’s new pipeline system, which aims to increase gas distribution across the kingdom and reduce carbon emissions
PrairieSky Adds $6.4MM in Mannville Royalty Interests, Reduces Debt
2024-04-23 - PrairieSky Royalty said the acquisition was funded with excess earnings from the CA$83 million (US$60.75 million) generated from operations.
Equitrans Midstream Announces Quarterly Dividends
2024-04-23 - Equitrans' dividends will be paid on May 15 to all applicable ETRN shareholders of record at the close of business on May 7.