Investing.com– Oil prices rose in Asian trade on Friday, recouping most of their losses this week as cold weather in the U.S. and Europe boosted hopes that demand for heating fuels would pick up.
Markets were also awaiting further signs of Chinese stimulus, after the country’s inflation data for December was largely subdued. Beijing is expected to increase fiscal spending in 2025 to pull the Chinese economy out of a prolonged slump.
which expires in March was up 0.4% at $77.22 a barrel, while West Texas Intermediate crude futures were up 0.4% at $75.53 a barrel by 20:21 ET (01:21 GMT) .
Cold weather has gripped the USA and Europe
A persistent polar vortex caused cold weather in several regions of the US and Europe, and snowstorms swept across the central US
That has increased bets that demand for heating fuels in the region will rise and feed into higher demand for crude oil.
But the cold weather is also expected to disrupt travel in the Northern Hemisphere. Recent data showed a series of strong gains in US crude stockpiles, signaling that demand in the world’s biggest fuel consumer remains weak.
Markets were also watching for fresh signals of stimulus in China, as recent inflation data showed little improvement in the economy. The Lunar New Year holidays in February are also expected to help boost travel demand in the country.
A strong dollar limits oil growth
But gains in oil prices have been capped by a strong dollar, with Brent and WTI futures set for a muted weekly performance.
It rose sharply this week, returning to a more than two-year high as traders braced for a slower pace of interest rate cuts in 2025 amid dour signals from the Federal Reserve.
The focus is now squarely on December data, due later on Friday, for more clues on rates.
Fed policymakers also expressed some caution about protectionist and expansionary policies under President-elect Donald Trump, which could support inflation in the long run.
A strong dollar is putting pressure on crude oil demand, making oil more expensive for international buyers.
