Oil holds steady on strong China data
Sales of petrol fell by 11% to 0.62 million tons, diesel demand dropped by 15% to 0.52 million tons, while sales of furnace oil reduced by 3% to 0.12 million tons in December, as compared to the same month of the previous year. photo: file
Oil prices held steady on Tuesday as upbeat economic data in No 2 oil consumer China offset wider concerns that possible increases to US interest rates could dampen growth in the top consuming country.
Brent crude was flat at $84.76 a barrel by 1515 GMT while US West Texas Intermediate was up 12 cents, or 0.2%, at $80.95.
“Ideas are building for another interest rate hike next month, which could place a damper on demand,” said Dennis Kissler, Senior Vice President of Trading at BOK Financial. Crude was also pressured by the Iraq federal government and Kurdistan Regional Government (KRG) taking a step towards resumption in northern oil exports from the Turkish port of Ceyhan after they were halted last month.
Earlier in the session, oil found support from figures showing that China’s economy grew by a faster-than-expected 4.5% in the first quarter while oil refinery throughput rose to record levels in March.
“As things stand, it’s all systems go in China, much to the relief of those betting on higher oil prices,” said Stephen Brennock of oil broker PVM. But the prospect of another increase to US interest rates, which has been supporting the US dollar, remained a drag on sentiment.
“The next step may depend on global growth and whether the economy can weather the recent storm, particularly in the US, where tighter credit could significantly weigh on growth for the rest of the year,” said Craig Erlam of brokerage Oanda.
Published in The Express Tribune, April 19th, 2023.
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