By Sonali Paul
MELBOURNE, Feb 3 (Reuters) - Oil prices made modest
gains in early trade on Friday but were heading for a second
straight week of losses, as the market looked for more signs of
a strong recovery in fuel demand in China to offset looming
slumps in other major economies.
Brent crude futures rose 16 cents, or 0.2%, to
$82.33 a barrel at 0110 GMT, while U.S. West Texas Intermediate
(WTI) crude futures gained 18 cents, or 0.2%, to $76.06 a
barrel.
So far this week, Brent has dropped by 4.8%, extending a
1.1% loss from the previous week. WTI has fallen by 4.5% after
sliding 2% in the prior week.
Mixed signs of a fuel demand recovery in China, the world's
top oil importer, have kept a lid on the market.
ANZ analysts pointed to a sharp jump in traffic in China's
15 largest cities following the Lunar New Year holiday, but also
noted that Chinese traders had been "relatively absent" from
markets.
The prospect of an economic rebound in China after COVID-19
curbs eased has buoyed the oil market so far this year, along
with a weaker dollar that makes the commodity cheaper for those
holding other currencies.
The dollar has fallen because aggressive interest rate hikes
by the U.S. Federal Reserve are no longer expected, whereas
other major economies are continuing with bigger rate increases
even as inflation has eased.
While supported by a weaker greenback, oil's gains have been
limited by the prospect of slow growth in the United States, the
world's biggest oil consumer, and recessions in places including
Britain, Europe, Japan and Canada.
"The crude demand outlook needs a clear sign that China's
reopening will be smooth, and that the U.S. economic growth
momentum does not deteriorate quickly," OANDA analyst Edward
Moya said in a note.
(Reporting by Sonali Paul in Melbourne; Editing by Jamie Freed)
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