Despite slower than anticipated economic growth in China and the resumption of Libyan oilfields, oil prices remained stable on Tuesday. US West Texas Intermediate (WTI) crude increased 28 cents to $74.43 a barrel in quiet trade, with the contract scheduled to expire on Thursday. Brent crude was up 26 cents at $78.76 a barrel.
Negligible Increase In Oil Price
As investors balanced a potential tightening of U.S. crude supply against weaker-than-expected Chinese economic growth, oil prices hardly moved on Tuesday.
Due to disappointing economic statistics from China, the world’s top oil importer, as well as the partial restoration of certain Libyan oilfields, both benchmark futures had dropped by more than 1.5% on Monday.
By 1151 GMT, Brent oil had increased by 26 cents to $78.76 per barrel, while West Texas Intermediate (WTI) crude in the United States had increased by 28 cents to $74.43 per barrel in comparatively quiet trade ahead of Thursday’s contract expiration.
The WTI contract for September also increased by 28 cents to $74.36. Market players were anticipating business data later on Tuesday, which is predicted to reveal that goods inventories and crude oil stocks in the United States decreased last week. [EIA/S]
Meanwhile, according to statistics from the Energy Information Administration released on Monday, U.S. shale oil output is expected to experience its first monthly fall since December 2022 in August.
Slow-moving GDP figures from China that were revealed on Monday “kept a cautious lid on prices with some reservations in its demand recovery,” according to Jun Rong Yeap, a market strategist at IG in Singapore.
Chinese GDP Increased
Source: CNN
In the second quarter, China’s GDP expanded 6.3% year over year, below the 7.3% average expert projection. Even yet, it is anticipated that the restart of production at two of the three Libyan fields that were shut down last week will increase world supply. A demonstration protesting the kidnapping of a former finance minister had an impact on output.
PVM analyst John Evans observed that OPEC frequently makes encouraging comments early in the month, boosting the market; the most recent example of this was Saudi Arabia’s announcement of a significant output decrease.
However, Evans noted that as the month goes on and the calendar encounters more information on economic performance and indicators, a sense of realism develops and a deflation in mood is unavoidable.
