As a U.S. government agency forecast a brighter economic outlook, oil prices rose. However, sudden negative data on China’s crude imports and exports then weighed on oil. Brent crude prices rose 83 cents to $86.17 per barrel. West Texas Intermediate crude in the United States climbed 98 cents to $82.92. Both contracts had declined by …
As a U.S. government agency forecast a brighter economic outlook, oil prices rose. However, sudden negative data on China’s crude imports and exports then weighed on oil. Brent crude prices rose 83 cents to $86.17 per barrel. West Texas Intermediate crude in the United States climbed 98 cents to $82.92. Both contracts had declined by $2 earlier in the day, but prices recovered after the U.S. Energy Information Administration forecasted gross domestic product growth of 1.9% in 2023, up from 1.5% previously.
The EIA also predicts that Brent crude oil prices would average $86 in the following half of 2023, a $7 increase over the prior prediction. According to the analysis, US crude output is predicted to climb by 850,000 barrels per day (bpd) to a record 12.76 million bpd in 2023, surpassing the previous top of 12.3 million bpd in 2019. Crude prices have been rising since June, owing mostly to extended voluntary limits in Saudi Arabian output as well as increased global demand, according to the EIA.
The EIA also mentioned that they expect these factors to continue to reduce global oil inventories and put upward pressure on oil prices in coming months. However, China’s July oil imports were down 18.8% from the previous month to the lowest daily rate since January, but still up 17% YoY, weighing on prices on Tuesday. Overall, China’s imports fell by 12.4% in July, significantly more than the 5% reduction predicted. Exports declined 14.5%, vs the 12.5% predicted by economists.
Despite the bleak numbers, several analysts remain optimistic about China’s fuel consumption forecast for August to early October. According to CMC Markets analyst, the peak season for building and manufacturing activities begins in September, and petrol consumption could gain from summer travel demand. After October, he expects demand to progressively decline.
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