On Friday, January 26, WTI oil concluded its best week in over four months, buoyed by positive economic data from the world's two largest economies, which raised hopes for stronger crude oil demand this year.

By the end of trading on January 26, WTI crude oil futures were up 65 cents (0.84%) at 78.01 USD per barrel. Brent crude futures gained 1.12 USD (1.36%), closing at 83.55 USD per barrel.

WTI experienced its best weekly gain since September 1, 2023, with a 6.27% increase, while Brent saw a 6.35% rise over the same period. Both contracts have surged more than 8% year-to-date.

For consumers, rising oil prices translate into slightly higher gasoline costs. The AAA reported that the national average price for a gallon of gasoline was 3.10 USD on Friday, up 1 cent from the previous week.

The U.S. reported better-than-expected economic growth for Q4 2023, with a 3.3% increase compared to Wall Street's forecast of 2%. Meanwhile, China is easing reserve requirements for banks in an effort to boost growth amid concerns of an economic slowdown.

Robert Thummel, Portfolio Manager at Tortoise Capital, stated, “The two largest oil-consuming countries in the world could see significant demand this year.”

Increased demand prospects coincide with a reduction in U.S. crude oil supply due to winter storms. The U.S. Energy Information Administration (EIA) reported a 9.2 million barrel decline in crude oil inventories last week, with U.S. production falling by 1 million barrels per day.

Additionally, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, have no plans to alter their production cuts at their meeting on January 25, as reported by Bloomberg News. OPEC+ is cutting 2.2 million barrels per day until at least the first quarter to support oil prices.

There are also signs that a ceasefire in Gaza may be underway, which could alleviate geopolitical risks in the Middle East that often drive up oil prices.

Source: VietstockVietstock