Oil steady as weak Chinese economic data offsets gains from lower oil stocks

By Arathy Somasekhar

(Reuters) – prices were little changed on Friday and were set to close flat for the week after three straight weeks of gains, as markets weigh lower inventories and tapering interest rate hikes against weak Chinese economic data that could cap demand.

Brent futures rose 3 cents to $79.67 a barrel by 0016 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 9 cents to $75.74 a barrel. Prices closed marginally higher on Thursday.

Brent was on track to close down 0.2% for the week, while WTI was set to tick up 0.4%. Both benchmarks had gained for three consecutive weeks.

Supporting prices, U.S. crude inventories fell last week, supported by a jump in crude exports as well as higher refinery utilization, the Energy Information Administration (EIA) said on Wednesday.

In addition, recent data, including lower-than-expected inflation and moderating job growth, have convinced many investors and analysts that the Federal Reserve’s expected July rate hike will be the last of its current tightening cycle.

Higher interest rates could slow economic growth and reduce oil demand.

Keeping a lid on prices, however, were China’s weak economic figures. The world’s second biggest oil consumer this week posted disappointing growth in second-quarter gross domestic product, increasing the likelihood of the economy’s missing the government’s 5% annual growth target.

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