Oil prices continued their ascent during Friday's Asian trade, extending two-month highs amid optimism that governments worldwide will bolster policy measures to revive economic growth, potentially driving higher fuel demand.
By 3:10 pm AEDT (4:10 am GMT), Brent crude futures had risen $0.23, or 0.3%, to 10-week highs of US$76.16 a barrel. U.S. West Texas Intermediate crude increased $0.29 (0.4%) to 11-week highs of $73.42 a barrel.
Both benchmarks are poised for their second consecutive weekly gain as trading liquidity improves with the end of holiday disruptions.
Among data releases, manufacturing activity for December across Asia, Europe, and the United States reflected weak performance, with central banks likely to adopt more accommodative policies given below-target inflation levels.
Lower interest rates are expected to spur economic growth, which could drive higher fuel consumption. Investors anticipate further rate cuts by the U.S. Federal Reserve this year, alongside Chinese President Xi Jinping’s pledge for more proactive economic measures.
In the U.S., gasoline and distillate inventories surged last week as refineries increased output, even as fuel demand fell to a two-year low, according to the Energy Information Administration (EIA).
Crude stockpiles declined by 1.2 million barrels to 415.6 million barrels, less than the expected 2.8-million-barrel draw.
Weather forecasts predicting a cold snap in the U.S. and Europe could also lift demand for diesel, potentially substituting natural gas for heating in the coming weeks.