Sign Up for FREE Daily Energy News
 
BREAKING NEWS:
Copper Tip Energy Services
Hazloc Heaters
WEC - Western Engineered Containment
Copper Tip Energy
WEC - Western Engineered Containment
Hazloc Heaters

Oil Rises With China Economic Data Countering Demand Fears


By Grant Smith and Sharon Cho

(Bloomberg) Oil rose as data showed China’s economic recovery from the coronavirus crisis is gathering strength, offsetting a bleak assessment of demand by another top energy organization.Futures gained 1.2% with below-average trading volumes in New York. Chinese retail sales rose for the first time this year in August while industrial production expanded by a higher-than-expected 5.6%. The data drove European equities and U.S. stock futures higher.The International Energy Agency was the latest bearish voice on oil demand, following pessimistic calls this week from BP Plc, Trafigura Group and the OPEC cartel. The market outlook has grown “even more fragile” with a resurgence of the pandemic, the IEA said Tuesday.

Prices — down about 12% this month after rising in the previous four — also face some headwinds from the latest expectations for U.S. crude stockpiles. Inventories in the world’s biggest consumer rose by about 2.3 million barrels last week, according to a Bloomberg survey before official government data on Wednesday. Industry figures are due later Tuesday.

U.S. crude stockpiles set to increase a second week

“The market has now priced in the bleak demand recovery projections and the supply comeback,” said Bjornar Tonhaugen, an analyst at consultant Rystad Energy A/S in Oslo. “We are now at a stage where until things get better at the demand front, prices may swing around the same mark for a while.”

Prices
  • West Texas Intermediate for October delivery rose 42 cents to $37.68 a barrel as of 8:28 a.m. in New York, after falling 7 cents on Monday
  • Brent for November gained 34 cents, or 0.9%, to $39.95. It lost 0.6% in the previous session

U.S. gasoline stockpiles probably fell by 600,000 barrels last week, according to the survey, which would be a sixth weekly decrease if confirmed by Energy Information Administration data. Distillate inventories, which include diesel, are also expected to decline.

OPEC this week cut its demand forecasts ahead of a meeting with its allies on Thursday to determine if their output curbs are enough to stave off a glut as many countries struggle to contain surging virus infections. Meanwhile, Nigeria’s crude — often viewed as a bellwether for the wider oil market — is again selling slowly as traders report lackluster demand for the grades.



Share This:



More News Articles


New SHOWCASE Directory Companies

 

CDN Controls
Challenger Geomatics
Caliper Inspection
Canline Pipeline Solutions
Gemini Fabrication
DyCat Solutions
Environmental Mats