Oil prices rose in Asian trade on Thursday as focus turned to upcoming trade data from China for more cues on demand in the world’s largest crude importer.
Focus also remained on a potential ceasefire between Israel and Hamas, especially as the U.S. picked up its efforts to broker an agreement. The Biden Administration paused weapon shipments to Israel over its invasion of Rafah.
Brent oil futures expiring in July rose 0.3% to $83.82 a barrel, while West Texas Intermediate crude futures rose 0.3% to $78.83 a barrel by 20:38 ET (00:38 GMT).
Prices had risen slightly on Wednesday after data showed a draw in overall crude inventories. But a build in gasoline and distillate inventories offset the overall draw.
Strength in the dollar also kept any major gains in crude limited, as a string of Federal Reserve officials warned that interest rates will remain high for longer.
China trade data on tap, crude imports in focus
Oil markets were now awaiting Chinese trade data, which is due later in the day.
The data is expected to provide more insight into the world’s biggest oil importer, after it clocked its worst trade balance in four months in March.
Particular focus will also be on China’s oil import figures, which rose slightly in the first quarter of 2024.
While Chinese oil demand has remained steady in recent months, amid some resilience in the economy, traders fear that any more potential weakness in the Chinese economy will erode the country’s appetite for crude.
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A post-COVID economic recovery in China largely failed to materialize in 2023, denting bets for a sharp rebound in Chinese demand.
Oil prices more likely to dip below $80 than rise above $90- Macquarie
Analysts at Macquarie said they expected Brent to break below $80 in the coming months, citing “bearish fundamentals” and increasing expectations of an Israel-Hamas ceasefire.
Increased production outside the Organization of Petroleum Exporting Countries and allies (OPEC+) is also expected to factor into less tighter supplies, while sticky inflation and high for longer interest rates are likely to weigh on demand.
Still, any potential interest rate cuts could help buoy demand later this year. Macquarie analysts also said that any extension of ongoing production cuts by the OPEC+ will offer relief to oil prices.
