During the Friday session, oil prices remained under pressure due to the higher interest rates in the USA and the rest of the world. However, the oil remains supported over the long term due to an uptick in Chinese demand.
But it wouldn't be wrong to say that the recent activity in the crude oil market is a combination of several wild swings. But the main indicator that supports a bullish oil market is the economic activity in China.
Recent data suggest that business activity in China is already much better than the forecast. So on that front, that's definitely a plus for the oil markets. However, we can't ignore the hawkish signals from the Fed and other major central banks around the world.
In a sense, we can say that the oil market's activity is directly tied to inflation across the globe. After all, the only reason we have high-interest rates is inflation!
The Brent oil futures touched the price of $84.45 per barrel after dropping 0.1%. On the other hand, the WTI crude futures touched $77.89 after dropping 0.4%. Basically, both of the crude oil benchmark indexes were down due to the hawkish policies of the central banks.
But if we look at their weekly activity, both contracts are bullish in the range of 1.5% - 2%. The Brent Oil Futures is up by 1.5% for the week, while the WTI is up by 2% for the week.
For the most part, the economic reports from China are very optimistic and are hitting a rebound. For starters, the growth of the composite purchasing manager index from China is at the decade's fastest pace!
Based on the economic reports we have received for January and February from China, it appears that China will be a key driving force for crude oil in 2023.
As for the USA and other major economies, the high-interest rates will keep a cap on economic growth. So for these economies, the overall economic activity will remain low or even depressed.