Crude oil closes higher, supported by a weak dollar and expectation of rising demand in China

Crude futures closed up more than $1 on Friday (Jan. 13), posting their biggest weekly gain since October, as the U.S. dollar sank to a seven-month low and there were signs of rising demand from China.

  • WTI crude futures rose $1.47, or 1.9%, to close at $79.86 per barrel, up 8.4% for the week.
  • BRENT crude futures rose $1.25, or 1.5%, to close at $85.28 per barrel, up 8.6% for the week.

The dollar index fell to its lowest level in more than seven months after the release of consumer price index (CPI) data on Thursday, which showed that inflation in the U.S. fell in December for the first time in two and a half years. This fueled hopes that the U.S. Federal Reserve (Fed) will slow its rate hikes.

The dollar index fell 0.08% to $102.2110 against a basket of six major currencies, with a weaker dollar expected to support oil demand. This is because it makes oil prices cheaper for buyers holding other currencies.

Chinese crude oil purchases in the past and increased traffic on the roads have raised hopes that China’s oil demand will recover after the opening of borders and the easing of COVID-19 control measures.

UBS analysts said that investors will focus on China’s recovering oil demand. And these factors have given a boost to oil prices. The market will keep an eye on Chinese crude oil imports and an increase in oil demand forecasts from energy organizations such as OPEC and the International Energy Agency (IEA).

OPEC and its allies, including Russia, will meet in February to assess the oil market situation, and there are concerns that OPEC may further curb oil production to support the recent price decline.

The Spot Market is Closed

Saturday, January 14, 2023

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
12.00

80.07

+1.08

+2.14%

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