Oil prices experienced an uptick on Wednesday, driven by anticipations of consistent demand in the U.S. and China, the foremost consumers of oil globally, in the context of a strengthening economic outlook. Brent crude futures increased by 29 cents, representing a 0.42% rise, reaching $69 per barrel. U.S. West Texas Intermediate crude futures increased by 40 cents, representing a 0.6% rise, reaching a price of $66.92.
The market reversed two days of declines, as it downplayed the potential for supply disruptions following U.S. President Donald Trump’s threat of tariffs on Russian oil purchases. Prices have fluctuated within a relatively narrow band as indications of consistent demand stemming from a rise in travel during the Northern Hemisphere summer have contended with apprehensions that U.S. tariffs on its trading partners may hinder economic growth and dampen fuel consumption.
Nonetheless, leading oil producers are indicating a positive outlook for economic growth in the latter half of the year, while data from China reflects a steady growth trajectory.
Current strong seasonal demand is generating upward momentum for oil prices, coinciding with the peak of summer travel and industrial activity,” noted analysts from LSEG. “The uptick in gasoline consumption, particularly in the United States during the Fourth of July holiday, indicates strong fuel demand, which has mitigated the negative impact of increasing inventories and tariff-related anxieties.”
Data from China indicated that growth decelerated in the second quarter; however, the decline was less pronounced than earlier apprehensions suggested, partly due to frontloading strategies implemented to circumvent U.S. tariffs. This alleviated certain apprehensions regarding the economic conditions of the globe’s foremost crude importer.
The data revealed that China’s crude oil throughput in June increased by 8.5% compared to the same month last year, suggesting a rise in fuel demand. According to consultants, that figure represented the highest level since September 2023, attributed to an increase in operations at state-owned refineries and a subsequent recovery in profit. Furthermore, the Organization of Petroleum Exporting Countries (OPEC) projected in a monthly report on Tuesday that the global economy is expected to improve in the latter half of the year, enhancing the outlook for oil demand.
The report indicated that India, China, and Brazil are exceeding expectations, whereas the U.S. and EU are in the process of recovering from the previous year.