Oil prices rose on expectations of summer demand in the US and China
16 July 08:44
On Wednesday, oil prices rose due to expectations of steady summer demand in the world’s two largest consumers – the United States and China. At the same time, analysts remain skeptical about the state of the global economy, "Komersant Ukrainian" reports citing Reuters.
Quotes fluctuated in a narrow range as signs of stable demand from increased travel during the summer season in the northern hemisphere competed with concerns that US tariffs on trading partners would slow economic growth and fuel consumption.
According to OilPrice.com, futures for Brent crude oil rose 25 cents, or 0.36%, to $68.96 per barrel as of 08:37 Kyiv time. Futures for U.S. WTI crude oil rose 38 cents, or 0.57%, to $66.90.
This reversed the trend after two days of decline, when the market devalued the potential for supply disruptions after US President Donald Trump threatened to impose tariffs on Russian oil purchases.
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China added confidence
Major oil-producing countries are showing signs of improving economic growth in the second half of the year, with data from China showing steady growth.
“Strong seasonal demand is currently providing upward momentum to oil prices as summer travel and industrial activity peaks. Increased gasoline consumption, especially in the US during the July 4 Independence Day celebrations, showed robust demand for fuel, which helped offset bearish pressure from rising inventories and concerns about tariffs,”
– lSEG analysts said.
Data from China showed that growth slowed in the second quarter, but less than expected, partly due to accelerated purchases to avoid US tariffs. This eased some concerns about the economy of the world’s largest oil importer.
The data also showed that China’s crude oil refining in June was up 8.5% from a year earlier, indicating stronger demand for fuel.
Prices will go down
However, some analysts see the price recovery as a temporary phenomenon.
Much of the stabilization of oil markets after two volatile sessions was the result of a mild technical correction rather than any significant shift in underlying fundamentals, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“Investors should keep an eye on inflation and interest rate expectations in the United States, as Trump’s continued efforts for broader tariffs could be inflationary and could depress fuel demand in the medium term,” she said,
– she says.
OPEC’s stance remains more optimistic, Sachdeva noted, citing the cartel’s monthly report on Tuesday, which predicted that the global economy would perform better in the second half of the year, improving the outlook for oil demand.
Brazil, China and India are exceeding expectations, while the US and EU are recovering from last year, the report added.
“Technical indicators may provide short-term relief, but fundamentally the market is lacking momentum,”
– sachdeva added.
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