Oil prices edge lower; set for positive week on Chinese optimism
Investing.com — Oil prices edged lower Friday, with traders taking profit from the hefty gains seen this week, largely on optimism that the vital Chinese economy is showing signs of improvement.
By 09:05 ET (13.05 GMT), the U.S. crude futures traded 0.2% lower at $89.98 a barrel, while the Brent contract dropped 0.2% to $93.49.
The crude market received a boost earlier Friday following the release of stronger-than-expected industrial production and retail sales data from China, boosting optimism over an economic recovery in the largest crude importer in the world.
This added to the positive sentiment generated by the decision of the People’s Bank of China on Thursday to cut the reserve requirement ratio for local banks by 25 basis points — its second such cut this year. The move is expected to release more liquidity into the Chinese economy and potentially shore up economic growth.
China's oil refinery throughput in August also surged to a record high, data on Friday showed, as solid summer travel demand and a rush to take advantage of strong export margins led processors to keep run rates elevated.
The refining figures come as markets are attempting to gauge if output reductions by key producers Saudi Arabia and Russia will keep supplies tight this year.
Both crude benchmarks were set to gain more than 3% each this week, their third straight week of gains.
Crude prices have been on a tear since early June, after Saudi Arabia and Russia said they will cut supply by a combined 1.3 million barrels per day. The two recently extended their supply cuts until the end of the year, providing another leg up to crude prices.
The prospect of tighter markets, in the wake of the supply cuts, has been the biggest boost to oil
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