Stronger-than-forecast US economic growth data combined with Chinese fuel demand slated to rise amid declining Covid-19 infection numbers are propping up oil prices Friday.

A barrel of European reference oil Brent trades for USD 87.83 Friday morning CET against USD 87.14 Thursday afternoon. US benchmark crude West Texas Intermediates sells at the same time for USD 81.33 against USD 81.16. 

Even though both crude prices increased slightly in today’s early morning hours, market observers note high probability of larger fluctuations ahead as traders bide their time up to next week’s meeting of the Organization of Petroleum Exporting Countries and OPEC+ allies. 

Meanwhile, market players eagerly await news of the US Federal Reserve’s coming interest rate meeting among the Federal Open Market Committee (FOMC).

”Oil might have trouble making any substantial moves to finish the week as many traders will wait to see what happens with next week’s two massive events; the OPEC+ virtual meeting on output and the FOMC decision,” the news agency cites Edward Moya, senior market analyst at OANDA, noting.

OPEC+ representatives plan to meet Monday to discuss forward-looking output quotas among the cartel’s members, with current policy on curbed production expectedly holding fast until delegates reach a resolution.

FOMC will conclude its rate meeting on Feb. 1 which the market forecasts will result in a hike of 25 basis points.

Improvement in China’s pandemic situation also stokes trader confidence Friday after data show the number of serious infections down by 72% after peaking earlier in January. At the same time, the number of Covid-19 related deaths in the nation has decreased by 79%, boding possible normalization soon in China.