Oil prices steadied on Thursday as markets shrugged off deflationary indicators in China and looked for further clues on the status of demand from the world’s two biggest oil consumers.
Brent crude futures rose 8 cents, or 0.1%, to $79.62 a barrel by 0500 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 6 cents, or 0.1%, at $75.39 a barrel.
The uptick came after both benchmarks fell more than 2% to their lowest since mid-July on Wednesday, as worry over potential supply disruptions in the Middle East eased and concern over U.S. and Chinese demand intensified.
“The more subdued gains still reflect reservations in place, with macroeconomic factors and technicals giving sellers the upper hand for now,” said Yeap Jun Rong, a market strategist at IG.
Thursday’s gains likely reflect an attempt for prices to stabilise after the strong sell-off in previous days, said Yeap.
Meanwhile, China inflation data released on Thursday showed that October CPI fell 0.2% year on year, while PPI data fell 2.6% year on year. This was broadly in line with a Reuters’ poll that forecast CPI would fall 0.1% and PPI 2.7%.
Earlier this week, customs data showed that China’s total exports of goods and services contracted faster than expected, although the country’s crude imports in October were robust.
On the plus side for oil demand, China’s central bank governor, Pan Gongsheng, said the country is expected to achieve its annual growth target of 5% for this year.
For the United States, inventory data may indicate a weakening in demand. U.S. crude oil inventories increased by 11.9 million barrels over the week to Nov. 3, sources said, citing American Petroleum Institute figures.
If confirmed, this would represent the biggest weekly build since February. The U.S. Energy Information Administration (EIA), however, has delayed release of weekly oil inventory data until Nov. 15 for a system upgrade.
Barclays on Wednesday cut its 2024 Brent crude price forecast by $4 to $93 a barrel, citing resilient U.S. oil supply and higher output from Venezuela following the relaxation of sanctions on the Latin American producer.
(Reporting by Andrew Hayley in Beijing and Jeslyn Lerh in Singapore; Editing by Tom Hogue and Stephen Coates)