Tuesday saw a slight uptick in oil prices as positive economic statistics from China, the world’s second-largest oil consumer, more than countered general worries that potential hikes in U.S. interest rates may slow development in the world’s largest oil consumer.
Around 12:48 p.m. ET (1648 GMT), Brent crude was up 49 cents, or 0.6 percent, to $85.25 per barrel, while U.S. West Texan Intermediate was up 49 cents, or 0.6 percent, to $81.32.
According to statistics, China’s GDP expanded by 4.5 percent in the first quarter, faster than forecast, and in March, throughput at oil refineries reached new highs.
According to the overall picture of China’s development, the market is still undersupplied, according to Price Futures Group analyst Phil Flynn.
Yet the likelihood of yet another increase in U.S. interest rates kept the greenback strong and kept morale down. Markets anticipate a 25 basis point rate increase from the US Federal Reserve at its meeting in May.
According to Raphael Bostic, president of the Atlanta Fed, the U.S. central bank will likely raise interest rates one more time in order to combat inflation.
On the forecast for oil prices, Craig Erlam of brokerage OANDA said, “The next step may rely on global growth and if the economy can weather the current storm, especially in the U.S., where tighter credit might substantially impact on growth for the remainder of the year.”
The Kurdistan Regional Government (KRG) and the federal government of Iraq exerted pressure on crude by moving to resume northern oil shipments through the Turkish port of Ceyhan after they were suspended last month.
After previous advances, the dollar weakened on Tuesday. The price of goods denominated in the dollar increases for customers using foreign currencies.
According to Dennis Kissler, senior vice president of trading at BOK Financial, the majority of traders think the current oil price surge has to be corrected.
By the conclusion of the previous week, crude registered advances for 4 consecutive weeks, a stretch not seen since June 2022.
The most recent inventory snapshot for the United States will be in the spotlight on Tuesday. Experts predict a 2.5 million barrel drop in U.S. crude stocks as well as drops in gasoline and distillates.
The American Petroleum Institute’s first of two reports expected this week is at 4:30 p.m.