China optimism on oil

Oil is set to end the week little changed as concerns about an economic slowdown dampen optimism about Chinese demand. U.S. crude traded around $81 a barrel after closing 1.1 percent higher on Thursday. U.S. economic growth beat expectations in the final quarter of 2022, but there is still a risk of a severe recession this year. The Federal Reserve is expected to raise interest rates further next week. Oil has rebounded from a sharp decline at the start of the year, largely on hopes that consumption at home will recover quickly after China lifts its COVID-19 policy. Trafigura Group sees “a lot of upside” as pent-up demand is being released and liquidity is returning to the futures market. Investors are weighing the potential impact of European Union sanctions on Russian seaborne shipments of petroleum products early next month. The EU plans to cap the price of premium refined fuel exports such as diesel at $100 a barrel and impose lower caps of $45 for discounted products.