Oil rises as markets assess falling inventories and possible Chinese stimulus

Brent crude prices rose in Asian trading on Friday, amid market assessments of the possibility of announcing economic stimulus measures in China after weak economic data, as well as falling inventories in the United States and reducing supplies from two major producers.

Brent crude futures rose 63 cents to $80.27 a barrel by 0425 GMT, while US West Texas Intermediate crude rose 62 cents to $76.27 a barrel. Prices ended Thursday slightly higher.

For the week as a whole, Brent crude is heading for a 0.5 percent rise, while US crude is heading for a 1.1 percent increase. This means that the two benchmarks continued to rise for the fourth week in a row.

Weak economic data from China weighed on oil prices all week after the world’s second-biggest oil consumer reported disappointing growth in gross domestic product for the second quarter, raising the possibility of missing the government’s 5 percent annual economic growth target.

However, sentiment in commodities markets rebounded on hope that the central government would introduce more stimulus measures to support the economy.

Beijing announced on Wednesday that it will lay out plans to stabilize the growth of 10 sectors, as well as increase support for private firms.

Supporting prices was a decline in US crude inventories, supported by a jump in crude exports, the Energy Information Administration said on Wednesday.

In addition, recent data, such as a lower-than-expected inflation rate and moderate job growth, have convinced many investors and analysts that the Federal Reserve’s expected rate hike this month will be the last in the current tightening cycle.

Higher interest rates could slow economic growth and lower demand for oil.

Riyadh announced in early July that it would extend a voluntary production cut of 1 million barrels per day until August, while Moscow said it would cut exports by 500,000 barrels per day in August.