Oil prices slow moving determining the direction
2023.03.02 02:57
Oil prices slow moving determining the direction
By Ray Johnson
Budrigannews.com – On signs of a strong economic rebound in China, the world’s top oil importer, oil prices increased on Thursday, extending gains from the previous two sessions. However, gains were capped by an increase in inventories and concerns regarding overall global demand.
U.S. West Texas Intermediate (WTI) crude futures were up 9 cents, or 0.1%, at $77.78 at 0445 GMT, while futures rose 12 cents, or 0.1%, to $84.43 a barrel.
After data showed that manufacturing activity in China grew at the fastest rate in more than a decade in February, both contracts increased by approximately one percent in the previous session. This added to evidence of an economic rebound in the world’s second largest economy following the removal of strict COVID-19 curbs.
However, the market’s gains were halted by ten consecutive weeks of crude stock builds in the United States.
The Energy Information Administration reported that crude inventories in the United States increased by 1.2 million barrels in the week ending February 24 to 480.2 million barrels, reaching their highest level since May 2021.
A rise of 500,000 barrels was anticipated by Reuters-interviewed analysts.
However, shipments of U.S. crude oil increased to 5.6 million barrels per day (bpd) last week thanks to record exports, keeping the build smaller than in recent weeks.
According to Serena Huang, head of APAC analysis at analytics firm Vortexa, prices of oil remained “largely unchanged” as a result of looming uncertainty over the global demand outlook.
After inflation in Germany, Europe’s largest economy, increased more than anticipated in February, with food and energy prices rising despite relief measures, expectations for rate hikes by the European Central Bank (ECB) are growing.
This comes after inflation rose unexpectedly in Spain and France, two important European economies.
In February, manufacturing in the United States contracted for the fourth consecutive month. However, there were indications that factory activity was beginning to stabilize, with a measure of new orders rising from a level that was more than two and a half years lower.
“Inflation in Germany raised concerns that the ECB would need to be more aggressive in its cycle of tightening. OANDA senior market analyst Edward Moya wrote in a note, “The U.S. data shows the economy is still slowing down, but some parts are improving.”
“The risks are clearly to the upside, but oil appears to be stuck in a trading range. After the nonfarm payroll report on Friday, some traders might wait until we have a better idea of when the peak rate will be.”
Indian refineries processed a record amount of crude oil in January, according to preliminary government data released on Wednesday, as the nation increased imports of Russian barrels that Western nations rejected.
The world’s third-largest oil importer and consumer saw refinery throughput of 5.39 million barrels per day in January, the highest level recorded by Reuters since 2009.
