Investing.com– Oil prices extended gains into Asian trade on Friday, buoyed by more stimulus measures from major importer China, while the prospect of tighter supplies and steady demand continued to provide upward momentum.
Crude prices were at their highest level since early-November 2022, with their latest round of gains coming as China said it will cut the reserve requirement ratio for local banks by 25 basis points- its second such cut this year. The move is expected to release more liquidity into the Chinese economy and potentially shore up economic growth.
The rate cut comes as the world’s largest oil importer struggles with a slowing post-COVID economic recovery, with a string of recent data prints for August showing persistent weakness in the economy.
Focus is now on and data from the country, due later in the day.
jumped 0.5% to $94.17 a barrel, while rose 0.7% to $90.77 a barrel by 20:23 ET (00:23 GMT).
Tighter supply, China cheer offsets dollar strength
The prospect of tighter supplies and improving Chinese demand saw oil prices largely trade past a stronger , with recent data also signaling resilience in the U.S. economy.
Data this week showed that rose more than expected in August, while also advanced above expectations.
The positive data pushed the dollar to a six-month high, although this did little to stall oil’s advance. The data also fueled bets that the will keep interest rates on hold next week.
Oil set for over 3% weekly gain
Brent and WTI futures were set to gain more than 3% each this week, their third straight week of gains.
Crude prices have been on a tear since early-June, after Saudi Arabia and Russia said they will cut supply by a combined 1.3 million barrels per day. The two recently extended their supply cuts until the end of the year, providing another leg up to crude prices.
The prospect of tighter markets, in the wake of the supply cuts, has been the biggest boost to oil prices this year, helping them jump more than 30% since June.
Tighter supplies also helped markets largely look past released this week, which showed that fuel demand in the country may be slowing as the travel-heavy summer season winds down.
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