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Oil prices mixed even as China data points to strong rebound for demand

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Oil futures were trying for a fifth straight gain Friday but were presently seeing lackluster trade as investors weighed a strong economic report from China against evidence of cases of COVID rising in parts of the world, threatening a fitful recovery from the demand-sapping pandemic.

The energy markets have so far been buttressed by monthly reports that point to a healthy recovery from the pandemic, as well as tensions between the U.S. and Iran and Russia, which could have some impact on crude markets.

On Friday, West Texas Intermediate crude for May delivery 
CLK21,
+0.16%

CL.1,
+0.16%

was down 13 cents, or 0.2%, at $63.33 a barrel on the New York Mercantile Exchange after rising 0.5% a day ago.

June Brent crude
BRN00,
+0.27%

BRNM21,
+0.27%

was trading virtually unchanged at $66.95 a barrel on ICE Futures Europe and had hit a notable intraday high on Friday above $67, after the global benchmark picked up 0.5% on Thursday.

For the week, WTI was looking at a weekly gain of 6.8%, while Brent was on track for a rise of 6.4%, based on the most-active contracts, FactSet data show. Those weekly returns would mark the best such rise for the contracts since the week ended March 5.

On Friday, the focus was on China which reported that its first-quarter gross domestic product jumped 18.3% on a year-on-year basis. A report on retail sales for the People’s Republic, one of the biggest importers of crude, also showed a more than 34% rise.

Global cases of COVID remain a key concern, however. Bloomberg reports that Germany’s healthcare system is getting stretched to the brink, with many hospitals overwhelmed with COVID patients and rising case counts.

Traders also kept an eye on talks between the U.S. and Iran amid negotiations toward a new nuclear accord. U.S. sanctions imposed on Russia, over alleged election interference and hacking, were being weighed for their impact on energy trade. Russia is one of the world’s biggest producers of crude and a member of group known as OPEC+, consisting of the members of the Organization of the Petroleum Exporting Countries and their allies.

But oil markets have been riding the back of upbeat data.

On Wednesday, the International Energy Agency lifted its demand outlook for crude and a U.S. government report revealed a third-weekly drop in weekly inventories.

In its monthly report, the International Energy Agency raised its forecast for global oil demand in 2021 by 230,000 barrels a day from its previous forecast. It now sees an increase of 5.7 million barrels a day from 2020 to 96.7 million barrels a day this year. Meanwhile, the Organization of the Petroleum Exporting Countries on Tuesday raised its forecast for global economic growth to 5.4% from 5.1%.

In a weekly report also issued Wednesday, the Energy Information Administration reported that U.S. crude inventories fell by 5.9 million barrels for the week ended April 9. That followed supply declines in each of the previous two weeks.

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