Oil prices experienced an uptick in early trading on Thursday, countering the losses observed in the prior session. This rebound was supported by robust economic data from leading oil-consuming nations and indications of diminishing trade tensions.
Brent crude futures increased by 27 cents, representing a 0.39% rise, reaching $68.79 per barrel at 0000 GMT. U.S. West Texas Intermediate crude futures increased by 31 cents, representing a rise of 0.47%, reaching a price of $66.69. Both benchmarks experienced a decline exceeding 0.2% in the prior session.
U.S. crude inventories decreased by 3.9 million barrels to 422.2 million barrels last week, according to the Energy Information Administration’s report on Wednesday. This decline exceeded expectations of a 552,000-barrel draw, indicating heightened refinery activity, a tighter supply situation, and rising demand. There exists a degree of backing from the advantageous margin conditions linked to the refining sector. “Product spreads remain relatively wide in all the regions,” stated John Paisie, president of Stratas Advisors.
Nonetheless, inventories of gasoline and diesel increased more than anticipated, which limited the rise in prices. The latest assessment from the U.S. central bank, published on Wednesday, indicated that economic activity has accelerated in recent weeks. Nonetheless, the outlook was characterized as “neutral to slightly pessimistic,” with businesses indicating that elevated import tariffs were exerting upward pressure on prices.
China’s data indicated that growth decelerated in the second quarter, though not to the extent that had been anticipated. This can be attributed, in part, to front-loading activities aimed at circumventing U.S. tariffs, which has alleviated concerns regarding the health of the world’s largest crude importer’s economy.
The data indicated that China’s crude oil throughput in June increased by 8.5% compared to the previous year, suggesting a rise in fuel demand. Furthermore, “support has come from the positive news pertaining to some easing of trade tensions between China and the U.S. with President Trump lifting the ban on the sale of AI chips to China along with the announcement of a trade deal with Indonesia,” John Paisie added. U.S. President Donald Trump expressed renewed optimism regarding the potential for an agreement with Beijing concerning illicit drugs. He also suggested that a trade deal with India is imminent, while an agreement may potentially be finalized with Europe as well. Trade tariffs may impede global economic growth, which could subsequently reduce fuel demand and exert downward pressure on prices.