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HomeTop NewsOil prices rise, buoyed by better-than-expected U.S. economic outlook

Oil prices rise, buoyed by better-than-expected U.S. economic outlook

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Oil prices rose for a second session on Friday, 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 percent, to trade at $88.64 a barrel by 1332 GMT. U.S. crude was up $1.17, or 1.44 percent, 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 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 the current output policy.

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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 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% 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 normalisation of the Chinese economy and boosting expectations of a recovery in oil demand.

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