Oil advanced in New York as traders assessed the latest data on Chinese demand and US stockpiles, while awaiting a resolution of the debt ceiling standoff in Washington.
West Texas Intermediate futures added 0.3 per cent as stock futures gained, reversing earlier losses to trade near $71 a barrel. The International Energy Agency said on Tuesday that consumption in China is rising faster than anticipated, though some banks cut growth forecasts after weak economic data for April.
Equity markets pointed to a recovery from a selloff on Wall Street as traders pinned hopes that talks will break a deadlock on raising the debt ceiling and avert a potentially catastrophic default.
The industry-funded American Petroleum Institute reported nationwide crude inventories rose by 3.7 million barrels last week due to a build-up at the key hub in Cushing, Oklahoma, according to people familiar with the figures. Still, gasoline and distillate inventories fell.
“Concerns over the health of the global economy and oil demand prospects have been front and center of the oil markets of late,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. “We’ve long argued that the bearish price action is unjustified.”
Crude is down about 11 per cent this year as China’s slower-than-expected recovery, a campaign of aggressive monetary tightening from the Federal Reserve, and more recent concerns over the US debt ceiling weigh on the outlook. Still, US retail sales rose in April, suggesting that consumer spending in the world’s biggest economy is holding up in the face of economic headwinds.
Prices
- WTI for June delivery rose 0.3 per cent to $71.09 a barrel at 12:14 p.m. in London.
- Brent for July settlement gained 0.4 per cent to $75.18 a barrel.
© 2023 Bloomberg L.P.
