Growing confidence in China’s recovery and mounting evidence of cooling US inflation buoyed crude prices for a sixth day.
West Texas Intermediate rose 1.3% to settle above $78 a barrel for the longest run of daily gains since February. US consumer prices fell 0.1% in December, the first monthly decline since 2020. The report bolstered risky assets with traders betting the Federal Reserve will slow the pace of rate hikes as inflation cools.
The brighter US outlook adds to growing optimism over China’s rebound. Beijing issued a bumper batch of import quotas this week and Chinese oil companies have stepped up purchases of US and West African grades in recent days.
Oil’s recent push higher has gathered steam after a rocky start to the year. Analysts remain bullish on the longer-term outlook. Goldman Sachs Group Inc. said on Wednesday that it expects crude to hit $110 by the third quarter if China’s economy successfully reopens, while Morgan Stanley sees a tighter second half to the year.
WTI for February delivery rose 98 cents to settle at $78.39 in New York.
Brent for March was rose $1.36 to settle at $84.03.
There are also tentative signs that trading activity has picked up in the new year. Open interest across the main oil-futures contracts this week climbed to the highest level since October. Low levels of futures holdings had been a driver of market volatility in recent months.
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