Weak US, China economic data weigh on oil prices
ALBAWABA – Oil prices fell Thursday morning to $76.79 and $72.65 per barrel of Brent and West Texas Intermediate (WTI) crudes, respectively.
Hopeful oil purchases for the United States (US) strategic reserves drove oil prices up 3 percent Wednesday.
On Wednesday, Brent settled 2.74 per cent higher at $76.96 a barrel, while WTI was up 2.78 per cent to $72.83 a barrel, Anadolu Agency reported.
But the price boost quickly dissipated over new US inventory estimates, citing the build-up of the US’s oil reserve inventory.
Meanwhile, weak economic data from the world's two largest oil consumers, the US and China, also drove oil prices down, according to Bloomberg.
US inventories rose to over 3.7 million barrels, relative to the market expectation of a draw of 1.3 million barrels, as reported in the American Petroleum Institute (API)’s report on Tuesday.
Higher inventory levels imply a fall in crude demand in the US.
Current factors affecting oil prices
In the meantime, talks about the US debt ceiling crisis have not seen significant progress as of yet.
Failing to raise the debt ceiling will cause the US to breach the threshold and default on debt payments for the first time in its history, the deadline for which is June 1.
The whole world; markets, governments, and individuals alike, are holding their breath for the end of the week. After President Joe Biden announced a potential deal on Tuesday, to be struck within days.
Overall, the US macroeconomic landscape is unclear, The National contended.
Retail sales fell below market expectations by 0.4 percent month-on-month in April, while industrial production exceeded forecasts with a month-on-month rise of 0.5 percent.
On the other hand, April industrial production and retail sales growth in China, the world's largest oil importer, fell short of expectations.
This suggests that the economy lost some steam in the first quarter, the news outlet highlighted.
On the supply side, markets will closely monitor the G7 leaders’ meeting on May 19.
The G7 group is slated to address sanctions evasion involving third countries, with the aim of limiting Russia's future energy production and curbing trade that supports their military.