London, May 17, 2024 – Oil steadied on Friday with global benchmark Brent heading for its first weekly gain in three weeks, as economic indicators from big consumers China and the United States bolstered hopes for higher demand.
China’s industrial output rose 6.7% year on year in April as recovery in its manufacturing sector gathered pace, accelerating from 4.5% in March and pointing to possibly stronger demand to come.
China also announced major steps to stabilise its crisis-hit property sector.
Brent crude oil was down 13 cents, or 0.2%, at $83.14 a barrel by 1133 GMT. U.S. West Texas Intermediate (WTI) crude lost 17 cents, or 0.2%, to $79.06.
Brent is on track for an increase of about 0.4% over the week, with WTI on course for a 1% gain.
Tamas Varga of oil broker PVM said that while the Chinese figures and another attack on Russian oil infrastructure were boosting prices, oil had yet to make a convincing recovery from its recent slump.
“The lack of explicit enthusiasm is probably the function of tepid product demand depressing refining margins,” he said.
Authorities have managed to contain a fire that started at Russia’s Tuapse oil refinery after a Ukrainian drone attack, officials in the Krasnodar region said.
Declines in oil and refined products inventories at global trading hubs have also created optimism over demand, reversing a trend of rising stockpiles that had weighed heavily on crude oil prices in previous weeks.
OANDA senior market analyst Kelvin Wong cited “several encouraging factors”, including two consecutive weeks of decline in U.S. crude stockpiles and expectations of more economic stimulus measures from China.
Recent economic indicators from the United States have fed into the optimism over global demand. U.S. consumer prices rose less than expected in April, data showed on Wednesday, boosting expectations of lower interest rates.
Lower U.S. interest rates could help soften the dollar, which would make oil cheaper for investors holding other currencies.
On the supply side, investors were mostly looking for direction from the coming OPEC+ meeting on June 1. (Reuters)
