Oil futures rose Friday, with major benchmarks on track to score a second winning week on optimism over Chinese crude demand as the country lifts its COVID-19 restrictions.

Price action
  • West Texas Intermediate crude for February delivery

    rose 34 cents, or 0.4%, to $80.67 a barrel on the New York Mercantile Exchange. March WTI

    the most actively traded contract, rose 52 cents, or 0.6%, to $86.67 a barrel.

  • March Brent crude

    the global benchmark, was up 51 cents, or 0.6%, at $86.67 a barrel on ICE Futures Europe.

  • Back on Nymex, February gasoline
    rose 0.9% to $2.619 a gallon, while February heating oil
    was up 0.6% at $3.396 a gallon.

  • February natural gas
    fell 1.3% to $3.232 per million British thermal units.

Market drivers

Crude stumbled in the first week of 2023 but subsequently found its footing, lifted by expectations that China’s lifting of COVID-19 restrictions will lead to an increase in demand for crude from one of the world’s largest energy consumers. China’s COVID curbs were seen as a weight on demand, helping to keep a lid on prices.

“As China embarks on a week of New Year festivities, there will also be no positive impetus from this direction, meaning that prices are likely to trend sideways,” said Barbara Lambrecht, commodity analyst at Commerzbank, in a note.

The Chinese government expects over 2.1 billion journeys to be made during a 40-day travel period around New Year’s Day, which falls on Sunday.

See: China’s Lunar New Year travel rush begins after COVID-19 restrictions are lifted

Fears of a U.S. recession and a global economic downturn, however, were seen as a cap on prices. Investors this week saw a mixed bag of economic data, including signs of further weakness in the U.S. manufacturing sector, a larger-than-expected drop in December retail sales, a further slowdown in producer prices and a surprising drop in first-time unemployment claims.