Oil stable on Chinese demand worries, record US exports
Concerns that China’s confused economic policies will continue under Xi Jinping were balanced by a weak dollar
27 October 2022 - 10:59
byAgency Staff
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London — Oil steadied on Thursday after a rally of nearly 3% in the previous session, as concern over slack demand in China balanced optimism from record US crude exports and signs that recession concerns are abating.
Global investors dumped Chinese assets early this week on fears about growth, with the economy beset by a zero-Covid policy, a property crisis and falling market confidence. China is the world’s biggest energy consumer.
Brent crude rose 23c, or 0.2%, to $95.92 a barrel by 8.10am GMT. US West Texas Intermediate (WTI) crude fell 17c, or 0.2%, to $87.74.
“Concerns that China’s muddled economic policies may continue under President Xi Jinping’s growing power weighed on sentiment,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Oil’s gain on Tuesday was prompted by figures showing record US crude exports, a hopeful sign for demand, even as crude stocks rose, as well as weakness in the US dollar stemming from hopes that interest-rate hikes may become less aggressive.
“It appears that recession concerns have abated lately, but continuously betting on healthy economic growth will prove foolhardy,” said Tamas Varga, an analyst at oil broker PVM.
The dollar was near a more than one-month low against a basket of currencies on the hopes that the US Federal Reserve will shift to less aggressive interest-rate increases.
A weaker dollar makes oil cheaper for holders of other currencies and tends to reflect greater investor appetite for risk assets.
Crude has slumped on economic concerns after surging earlier this year after Russia invaded Ukraine, with Brent coming close to its all-time high of $147 in March.
US and Western officials are finalising plans to impose a cap on Russian oil prices amid a warning from the World Bank that any plan will need active participation of emerging-market economies to be effective.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil stable on Chinese demand worries, record US exports
Concerns that China’s confused economic policies will continue under Xi Jinping were balanced by a weak dollar
London — Oil steadied on Thursday after a rally of nearly 3% in the previous session, as concern over slack demand in China balanced optimism from record US crude exports and signs that recession concerns are abating.
Global investors dumped Chinese assets early this week on fears about growth, with the economy beset by a zero-Covid policy, a property crisis and falling market confidence. China is the world’s biggest energy consumer.
Brent crude rose 23c, or 0.2%, to $95.92 a barrel by 8.10am GMT. US West Texas Intermediate (WTI) crude fell 17c, or 0.2%, to $87.74.
“Concerns that China’s muddled economic policies may continue under President Xi Jinping’s growing power weighed on sentiment,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Oil’s gain on Tuesday was prompted by figures showing record US crude exports, a hopeful sign for demand, even as crude stocks rose, as well as weakness in the US dollar stemming from hopes that interest-rate hikes may become less aggressive.
“It appears that recession concerns have abated lately, but continuously betting on healthy economic growth will prove foolhardy,” said Tamas Varga, an analyst at oil broker PVM.
The dollar was near a more than one-month low against a basket of currencies on the hopes that the US Federal Reserve will shift to less aggressive interest-rate increases.
A weaker dollar makes oil cheaper for holders of other currencies and tends to reflect greater investor appetite for risk assets.
Crude has slumped on economic concerns after surging earlier this year after Russia invaded Ukraine, with Brent coming close to its all-time high of $147 in March.
US and Western officials are finalising plans to impose a cap on Russian oil prices amid a warning from the World Bank that any plan will need active participation of emerging-market economies to be effective.
Reuters
Oil rises on record US crude exports, weaker dollar
Oil prices rise as dollar eases
Oil falls on rising US stockpiles, but is cushioned by supply concerns
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