Oil bounces as China, U.S. data ease recession concerns
SINGAPORE — Oil prices edged up from multi-month lows on Monday as investors’ appetite improved following data on U.S. jobs and Chinese exports that eased recession concerns.
Brent crude futures had risen 22 cents, or 0.2%, to $95.14 a barrel by 0439 GMT. U.S. West Texas Intermediate crude was at $89.18 a barrel, up 17 cents, or 0.2%.
Both contracts settled higher on Friday after jobs growth in the United States, the world’s top oil consumer, unexpectedly accelerated in July. On Sunday, China also surprised markets with faster than expected growth in exports.
Signs of weak demand in U.S. inventories last week had encouraged trades based on a weakening outlook, said Stephen Innes, managing director of SPI Asset Management. But the jobs and exports data had somewhat reversed that view, he added.
Front-month Brent prices last week hit the lowest levels since February, tumbling 13.7% and posting their largest weekly drop since April 2020, while WTI lost 9.7%, as concerns about a recession hitting oil demand weighed on prices.
China, the world’s top crude importer, imported 8.79 million barrels per day (bpd) of crude in July, up from a four-year low in June, but still 9.5% less than a year earlier, customs data showed.
Chinese refiners drew down stocks amid high crude prices and weak domestic margins even as the country’s overall exports gained momentum.
Reflecting lower U.S. gasoline demand, and as China’s zero-COVID strategy pushes recovery further out, ANZ revised down its oil demand forecasts for 2022 and 2023 by 300,000 bpd and 500,000 bpd, respectively.
Oil demand for 2022 is now estimated to rise by 1.8 million bpd year-on-year and settle at 99.7 million bpd, just short of pre-pandemic highs, the bank said.
Russian crude and oil products exports continued to flow despite an impending embargo from the European Union that will take effect on Dec. 5.
In the United States, energy firms last week cut the number of oil rigs by the most since September. It was the first drop in 10 weeks.
The U.S. clean energy sector received a boost after the Senate on Sunday passed a sweeping $430 billion bill intended to fight climate change, among other issues. (Reporting by Florence Tan; Editing by Gerry Doyle and Bradley Perrett)
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