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Optimism about Chinese demand leads crude oil to a strong weekly rise

FILE PHOTO: An oil seesaw at the Shengli field operated by Sinopec in Dongying, Shandong province, China.  January 12, 2017. REUTERS/Chen Aizhu/File
FILE PHOTO: An oil seesaw at the Shengli field operated by Sinopec in Dongying, Shandong province, China. January 12, 2017. REUTERS/Chen Aizhu/File

By Ahmad Ghaddar

LONDON, Jan 13 (Reuters) – Oil prices rose on Friday and were on track to gain more than 7% for the week on strong signs of demand growth in China, the world’s top crude importer, and expectations of less aggressive interest rate hikes in the United States.

* Brent crude futures were up 53 cents, or 0.6%, at $84.56 a barrel by 1027 GMT. West Texas Intermediate (WTI) crude futures were up 55 cents, or 0.7%, at $78.94 a barrel.

* Brent is up 7.6% so far this week and WTI is up 7%, recovering most of last week’s losses.

* Analysts noted that China’s recent crude purchases and a rebound in road traffic fueled confidence in a demand recovery in the world’s second-largest economy after the reopening of its borders and the easing of COVID-19 restrictions. 19 after the protests last year.

* In another encouraging sign, ANZ analysts noted that a congestion index covering the 15 Chinese cities with the highest number of vehicle registrations had risen 31% from the previous week.

* Oil prices have also been helped by the dollar’s slide to nearly nine-month lows, after data showed US inflation fell for the first time in two and a half years, reinforcing expectations that the Federal Reserve will slow. the pace of rate hikes.

* The weakness of the greenback tends to boost demand for oil, as it lowers the price of the commodity for buyers with other currencies.

(Additional reporting by Mohi Narayan in New Delhi and Sonali Paul in Melbourne; Editing in Spanish by Ricardo Figueroa)

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