The price of crude oil showed a substantial turnaround over the course of the trading day on Friday, recovering from an early sell-off to close sharply higher.
After slumping as low as $75.83 a barrel, the price of crude for April delivery surged $1.52 or 1.9 percent to $79.68 a barrel. For the week, crude oil spiked by 4.4 percent.
The early sell-off by oil prices came after a Wall Street report said United Arab Emirates is having an internal debate about leaving the Organization of Petroleum Exporting Countries (OPEC).
However, U.A.E. officials later denied the report, contributing to the substantial rebound by the price of crude oil.
Oil also benefited from optimism about the outlook for global demand following upbeat data from China and Europe.
A private survey showed activity in China’s services sector expanded at the fastest pace in six months in February, while a separate report showed a reading on eurozone business activity reached an eight-month high.
The Institute for Supply Management also released a report showing a very slight slowdown in the pace of growth in U.S. service sector activity in the month of February.
The ISM said its services PMI edged down to 55.1 in February from 55.2 in January, although a reading above 50 still indicates growth in the sector. Economists had expected the index to slip to 54.5.
“The oil market is starting to look tight again as China’s economy rebounds and over the resilience of the US service sector,” said Edward Moya, senior market analyst at OANDA.
He added, “Oil looks like it might try to find a home above the $80 a barrel level and that could happen next week if traders after the National Party Congress become impressed with China’s growth strategy.”
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