Oil prices were steady on Thursday amid upbeat Chinese trade data and after a US inventories report showed a weaker-than-expected increase in crude inventories and a sharp contraction in fuels. However, expectations that the US Federal Reserve may delay its policy easing slightly dampened sentiment in the oil market.
European Brent crude oil futures were down by 0.07 USD, or 0.08%, to 82.89 USD per barrel, while US light crude WTI futures were down by 0.05 USD, or 0.06%, at 79.08 USD per barrel, even as China’s import and export growth beat forecasts.
China’s trade balance data is a positive sign for the outlook for oil demand. However, the risk-averse sentiment dominated financial markets as Wall Street stocks fell. China, the world’s biggest crude importer, reported a 5.1% rise in imports in the first two months of 2024 from a year earlier to about 10.74 million barrels per day, customs data showed on Thursday, as refiners have been actively buying crude oil to cope with Chinese New Year fuel sales.
China’s January-February exports of refined products fell 30.6% yoy to 8.82 million tons, reducing supply for global markets.
Upbeat trade data from China, the world’s second-largest economy, showed the improvement in trade was encouraging for authorities trying to shore up a struggling economic recovery.
Both oil market benchmarks rose about 1 percent on Wednesday after it emerged that US crude inventories rose for a sixth straight week, rising by 1.4 million barrels, but well below the gain from the 2.1 million barrels forecast by analysts.
Stockpiles of gasoline and distillates fell more than expected, data from the US Energy Information Administration also showed.
Markets are already bracing for the risk that the US Federal Reserve’s first rate cut could be delayed until the second half of this year, according to a Reuters survey of currency strategists.
Fed Chairman Jerome Powell said continued progress on inflation is “not guaranteed”, although the US central bank still expects to cut its key interest rate this year.
