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Brent futures gained $1.30, or 1.5%, to trade at $88.77 a barrel
by 1214 GMT. U.S. crude was up $1.27, or 1.6%, at $82.28 and on
track for its highest daily jump in percentage terms for two
weeks.
Both benchmarks advanced by more than 1% on Thursday and are
heading for a third straight week of gains.
Brent's backwardation has strengthened to about $2.73 from less
than a dollar at the start of the month. Backwardation is a
market structure in which front-month contracts are more
expensive than those for later loading, indicating tight current
supply.
OPEC+ delegates meet next week to review crude production
levels, with sources from the oil producer group expecting no
change to current output policy.
The U.S. Federal Reserve's next decision on interest rates will
be made at meeting over Jan. 31 and Feb. 1 against a backdrop of
a dip to inflation and gross domestic product that grew by a
faster than expected 2.9% in the fourth quarter.
"The positive batch of data gave oil prices a lift," said PVM
analyst Stephen Brennock.
Gains on U.S. crude were capped by a 4.2 million barrel build in
stocks at Cushing, the pricing hub for NYMEX oil futures, this
week. [EIA/S]
"We believe soaring middle-distillate prices and cracks are
mostly behind crude’s bullish price action," JPMorgan said in a
note, pointing to heavy refinery maintenance and outages, plus
the European ban on Russian refined products from Feb. 5.
In China, critically ill COVID-19 cases are down 72% from a peak
early this month while daily deaths among COVID-19 patients in
hospitals have dropped by 79% from their peak, pointing to a
normalisation of the Chinese economy and boosting expectations
of a recovery in oil demand.
(Reporting by Shadia NasrallaAdditional reporting by Sudarshan
Varadhan in SingaporeEditing by David Goodman)
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