(Bloomberg) -- Oil headed for a narrow weekly gain as optimism about the outlook for demand eclipsed concerns about tighter monetary policy and an economic slowdown that have combined to roil wider financial markets.
West Texas Intermediate eased toward $111 a barrel in early Asian trading after ending higher on Thursday. The US crude benchmark has risen about 1% this week. It’s on course for a fourth consecutive weekly gain that would be the best run since mid-February, before Russia began its invasion of Ukraine.
Global fuel product markets are tightening, especially in the US, where gasoline and diesel prices have risen to unprecedented levels in the run-up to summer driving season. Nationwide travel is expected to approach levels seen before the coronavirus pandemic, according to a forecast from auto club AAA.
Oil has surged almost 50% this year as demand recovered from the impact of the pandemic and Russia’s assault on Ukraine sent shock waves through global markets. While the US and UK have announced bans on Russian exports, flows to Asia have picked up. China is seeking to replenish strategic stockpiles with cheap Russian oil even as officials grapple to suppress Covid-19 outbreaks.
Oil’s jump has contributed to the fastest inflation in decades, prompting the US Federal Reserve to vow that it’ll go on raising interest rates until there are clear signs that price pressures are easing. That’s spurred wild shifts in investors’ appetite for risk, swinging equity, bond and commodity markets.
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