Oil prices are poised for another weekly increase due to the recovery of Chinese demand.

Optimism over a recovery in Chinese demand is causing crude oil prices to close this week with yet another increase. New data about Chinese demand, revealed that it increased by about 1 million bpd in November, indicating more strengthening this year. The tightening of the oil market's supply would result from the growth of Chinese demand, thereby raising oil prices. On the downside, there are still indications that the American economy is weakening. The most recent updates include a decline in retail sales that suggests inflation is still a problem and the likelihood that the American manufacturing sector will experience a recession in the fourth quarter of 2022. The petroleum report from the Energy Information Administration this week had an impact on prices as well because it projected an 8.4 million barrel gain in crude oil inventories for yet another week. It came after a weekly inventory buildup of 19 million barrels that was anticipated for the first week of January. Brushing aside the massive inventory build in the US, the market is starting to fall for China’s demand rebound. Both OPEC and the IEA raised their global demand forecasts for 2023, arguing that the second half of this year would see rapid growth in Asian buying. So it looks like oil bulls have gained the upper hand despite some worrying economic data and refinery problems in the U.S.