Oil prices up as world's top consumers boost demand

Brent crude oil price news: Oil prices rose on Friday, driven by growing demand in the United States and China, the world's biggest oil consumers, and as the US Federal Reserve gave a positive signal on possibility of rate cuts.

Brent crude futures were up 0.45 per cent, or 37 cents, at $83.32 a barrel at 0110 GMT. US West Texas Intermediate crude futures rose 0.61 per cent, or 48 cents, to $79.44.

Data released by Energy Information Administration showed that US gasoline inventories fell by 4.5 million barrels last week, and distillate stockpiles were down by 4.1 million barrels. Both fell more than expected in a sign of a strong demand.

"With the US driving season just in the horizon, the market could get even tighter in coming weeks," ANZ Research said in a note. In China, imports of crude oil rose 5.1 per cent in the first two months of 2024 from a year earlier, and India's fuel consumption increased 5.7 per cent year-on-year in February amid strong factory activity in the world's third-biggest oil importer and consumer.

After accounting for the extra day in February this year, crude oil imports in China were up by 3.3 per cent in annual terms, Capital Economics said in a note, in line with expectations of a demand increase for the year.

"But that growth will be substantially lower than in 2023 when the end of zero-covid restrictions led to a surge in activity in the transport and travel sectors," the note said. Providing additional support to oil prices, Federal Reserve Chair Jerome Powell said on Thursday that the US central bank was "not far" from gaining enough confidence that inflation is faling to begin cutting interest rates.

In Canada, TC Energy's (TRP.TO), Keystone oil pipeline resumed service on Thursday after going offline and temporarily restricting a major conduit of Canadian oil to the United States - one of the factors supporting prices in the previous session.