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Oil benchmarks settle at highest level in 3 weeks
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Report that UAE may exit OPEC 'far from the truth,'
sources say
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Chinese data, record U.S. exports support oil prices
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Dollar falls; analysts see more weakness in next 12 months
(Updates with closing prices, analyst comment)
By Shariq Khan
BENGALURU, March 3 (Reuters) - Oil prices recovered from
a brief sell-off to gain by more $1 per barrel on Friday and
ended the week higher, driven by renewed optimism around demand
from top oil importer China.
Brent crude futures rose $1.08, or 1.3%, to settle
at $85.83 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled at $79.68 a barrel, up by $1.52, or 1.9%.
Both benchmarks posted their highest closing levels since Feb.
13.
Prices dropped early by more than $2 per barrel after a
media report said the UAE had held internal debates on leaving
OPEC and pumping more oil. Prices rebounded when two sources
with direct knowledge told Reuters the report was "far from the
truth".
Brent and WTI notched their third biggest weekly percentage
gains this year as strong Chinese economic data fed hopes for
oil demand growth.
"Crude has been on a rollercoaster today, charging lower on
rumors of UAE leaving OPEC+ before reversing sharply and
rocketing higher as this rumor was disputed, and crude hopped on
board the risk-on rally instead," said Kpler analyst Matt Smith.
China's service sector activity in February expanded at the
fastest pace in six months, and manufacturing activity there
also grew. China's seaborne imports of Russian oil are set to
hit a record high this month.
China, the world's top oil importer, is getting more
ambitious with its 2023 growth target, aiming as high as 6%,
sources told Reuters.
The oil market broadly shrugged off a 10th consecutive week
of U.S. crude stock builds , and record exports of
U.S. crude lent more support to prices, UBS analyst Giovanni
Staunovo said.
The dollar weakened, and analysts polled by Reuters expect
the greenback to be under pressure over the next 12 months,
which would make dollar-denominated oil cheaper for holders of
other currencies. The European Central Bank was still sending hawkish signals,
with ECB Governing Council member Pierre Wunsch saying its key
interest rate could climb as high as 4% if inflation remains
high.
(Reporting by Shariq Khan
Additional reporting by Shadia Nasralla, Sudarshan Varadhan and
Muyu Xu;
Editing Kirsten Donovan, David Goodman, Louise Heavens, Paul
Simao and David Gregorio)
