Oil prices fluctuated on Thursday, caught between the decline in US inventories last week and the early-week Chinese economic data suggesting a slowdown in growth and continued sluggish consumption.
Brent and WTI Prices
Around 10:00 GMT (12:00 in Paris), the price of a barrel of Brent crude for September delivery dipped by 0.08% to $85.01.
Its American counterpart, the West Texas Intermediate (WTI) barrel for August delivery, edged up by 0.06% to $82.90.
US Inventory Drawdown Provides Support
Prices were still buoyed by the significant decrease in US oil inventories last week.
These commercial reserves fell by 4.9 million barrels for the week ending July 12th, according to figures released Wednesday by the US Energy Information Administration (EIA). This exceeded analysts’ expectations of a decline of around one million barrels, as per a consensus compiled by Bloomberg.
Trump’s Potential Impact on Oil Production
However, “Donald Trump’s ambitions to increase US oil production could be a deterrent” for oil buyers, notes Ipek Ozkardeskaya of Swissquote.
Many analysts believe that the attempted assassination of 78-year-old former US President Donald Trump has increased his chances of winning the presidential election in November.
“But Trump’s influence on oil is not so straightforward,” Ozkardeskaya points out. “Yes, Trump wants to pump more, but he also wants to eliminate the transition to alternative energy sources and maintain demand for fossil fuels intact,” she explains.
China’s Economic Health Weighs on Market Sentiment
The market remains attentive to China and its economic health, as the country is the world’s largest oil importer.
A significant meeting of the Chinese Communist Party (CCP) Central Committee, the “Third Plenum,” took place this week in Beijing, led by President Xi Jinping. It focused on the economy, which has been sluggish since the pandemic.
Chinese leaders agreed on the need to “eliminate risks” in the economy and stimulate domestic consumption, according to state media.
However, investors, who are anticipating strong measures to support the Chinese economy, “are still digesting the fact that Chinese GDP has not lived up to expectations,” MUFG analysts remind us.
China’s economic growth slowed to 4.7% year-on-year in the second quarter, falling short of analysts’ expectations, amid a real estate crisis, subdued consumption, and economic uncertainties.