LONDON—Oil prices were on track for their biggest weekly gain since late August, with market sentiment buoyed by easing concerns over the Omicron coronavirus variant’s impact on global economic growth and fuel demand.
The Brent and WTI benchmarks were both on course for gains of more than 7 percent this week, their first weekly gain in seven, even after a brief bout of profit-taking.
Brent crude futures were up 66 cents, or 0.9 percent, at $75.08 a barrel by 1141 GMT after falling 1.9 percent on Thursday.
U.S. West Texas Intermediate (WTI) crude futures rose 74 cents, or 1 percent, to $71.68 after sliding 2 percent in a volatile session the previous day.
Earlier in the week, the oil market had recovered about half the losses suffered since the Omicron outbreak on Nov. 25, with prices lifted by early studies suggesting that three doses of Pfizer’s COVID-19 vaccine offers protection against the Omicron variant.
“The oil market has thus rightly priced out the ‘worst-case scenario’ again, but it would be well advised to leave a certain residual risk to oil demand in place,” said Commerzbank analyst Carsten Fritsch.
Keeping a lid on prices are faltering domestic air traffic in China, owing to tighter travel restrictions, and weaker consumer confidence after repeated outbreaks.
Meanwhile, ratings agency Fitch downgraded property developers China Evergrande Group and Kaisa Group, saying they had defaulted on offshore bonds.
That reinforced fears of a potential slowdown in China’s property sector, as well as the broader economy of the world’s biggest oil importer.
A stronger dollar, rising ahead of U.S. inflation data due later on Friday, also weighed on oil prices. Oil typically falls when the dollar firms because it makes oil more expensive for buyers holding other currencies.
By Shadia Nasralla