Oil flat amid global economic jitters and US stockpile boost
As surprising growth in US crude inventories couples with uncertain economic data from the US and China, oil prices remain in a state of uneasy stability
17 May 2023 - 08:06
byKatya Golubkova and Sudarshan Varadhan
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Tokyo — Oil prices were little changed on Wednesday as traders remained cautious after a surprise rise in US crude inventories stoked demand concerns on the heels of weaker-than-expected economic data from the US and China.
Brent crude futures slipped 3c to $74.88 a barrel. US West Texas Intermediate (WTI) crude edged down 2c to $70.84 by 2.22am GMT.
“Crude prices remain heavy as energy traders just can’t shake off global demand concerns. It doesn’t matter how upbeat everyone is for China’s second half of the year, the current situation is too disappointing,” said Edward Moya, an analyst at Oanda.
US crude stockpiles rose by about 3.6-million barrels in the week ended May 12, according to market sources citing American Petroleum Institute (API) figures. Seven analysts polled by Reuters had expected a 900,000 barrel drawdown.
US government data on crude and product stockpiles is due at 2.30pm GMT.
The crude inventory build added to concerns about US growth after data showed retail sales rose 0.4% in April, short of estimates for an increase of 0.8%.
Talks on raising the US debt ceiling continue to weigh on the market. The US treasury department has estimated that the US will go into a crippling default as early as June 1 if Congress does not lift the debt ceiling.
In China, April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter.
“Sentiment soured amid stalled US debt-ceiling talks and disappointing retailers’ earnings overnight. Recession fears again dragged on the global markets,” said Tina Teng, an analyst at CMC Markets.
Markets are closely following any new steps on expanding sanctions on Russia by the Group of Seven (G7) leaders when they meet in Japan on May 19-21.
G7 is looking to target sanctions evasion involving third countries, aiming to limit Russia’s future energy production and curb trade that supports Russia’s military, officials with direct knowledge of the discussions have said.
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 flat amid global economic jitters and US stockpile boost
As surprising growth in US crude inventories couples with uncertain economic data from the US and China, oil prices remain in a state of uneasy stability
Tokyo — Oil prices were little changed on Wednesday as traders remained cautious after a surprise rise in US crude inventories stoked demand concerns on the heels of weaker-than-expected economic data from the US and China.
Brent crude futures slipped 3c to $74.88 a barrel. US West Texas Intermediate (WTI) crude edged down 2c to $70.84 by 2.22am GMT.
“Crude prices remain heavy as energy traders just can’t shake off global demand concerns. It doesn’t matter how upbeat everyone is for China’s second half of the year, the current situation is too disappointing,” said Edward Moya, an analyst at Oanda.
US crude stockpiles rose by about 3.6-million barrels in the week ended May 12, according to market sources citing American Petroleum Institute (API) figures. Seven analysts polled by Reuters had expected a 900,000 barrel drawdown.
US government data on crude and product stockpiles is due at 2.30pm GMT.
The crude inventory build added to concerns about US growth after data showed retail sales rose 0.4% in April, short of estimates for an increase of 0.8%.
Talks on raising the US debt ceiling continue to weigh on the market. The US treasury department has estimated that the US will go into a crippling default as early as June 1 if Congress does not lift the debt ceiling.
In China, April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter.
“Sentiment soured amid stalled US debt-ceiling talks and disappointing retailers’ earnings overnight. Recession fears again dragged on the global markets,” said Tina Teng, an analyst at CMC Markets.
Markets are closely following any new steps on expanding sanctions on Russia by the Group of Seven (G7) leaders when they meet in Japan on May 19-21.
G7 is looking to target sanctions evasion involving third countries, aiming to limit Russia’s future energy production and curb trade that supports Russia’s military, officials with direct knowledge of the discussions have said.
Reuters
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