Oil prices rise on weak dollar, China economic recovery hopes

By Zeynep Beyza Kilic

Oil prices increased on Friday with the depreciation of the US dollar and expectations that China, the world's largest oil importer, would offer incentives to stimulate its economy.

International benchmark Brent crude traded at $84.35 per barrel at 10.15 a.m. local time (0715 GMT), a 0.27% rise from the closing price of $84.12 per barrel on Thursday.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $80.77 per barrel, up 0.47% from Thursday’s session close of $80.39 per barrel.

The continued depreciation of the US dollar against other currencies supports the upsurge in oil prices. A weaker dollar makes dollar-denominated oil more affordable to buyers of other currencies, causing increased purchases and higher oil prices.

The US dollar index fell 0.14% to 103.322 at 10 a.m. local time (0700 GMT) on Friday.

The Chinese Central Bank's announcement that it would supply market liquidity to assist economic growth aided the surge in oil prices. Markets anticipate that China, the world's second-largest oil consumer, will announce additional stimulus to strengthen its economy.

Meanwhile, the possibility of further rate hikes in the US is limiting the rise in oil prices.