Oil prices remain steady

25 Jun 2024 , 10:38 AM

Oil prices showed minimal change on Tuesday amidst concerns over China’s economic recovery, despite tensions in the Middle East and Ukrainian attacks on Russian refineries.

Brent crude futures for August delivery edged up by 7 cents to $86.06 per barrel at 0015 GMT, ahead of its upcoming contract expiry. The September contract, more actively traded, also rose by 8 cents to $85.23. Meanwhile, U.S. crude futures climbed by 11 cents to $81.74 per barrel.

Both benchmarks recorded a 3% increase last week, marking consecutive weeks of gains.

However, worries have emerged regarding China’s economic outlook, the world’s second-largest economy. Retailers faced challenges following a disappointing mid-year online shopping festival. Chinese consumers, significant oil importers, exhibited cautious spending behaviors amidst concerns about personal finances amid a real estate downturn, stagnant wage growth, and high youth unemployment. These factors jeopardize China’s targeted economic growth of “around 5%” this year.

In geopolitical developments, Israeli airstrikes targeting aid supplies led to casualties in Gaza, exacerbating tensions in the region. Meanwhile, Ukraine reported strikes on more than 30 Russian oil processing and storage facilities, including recent attacks on refineries like Ilsky, a major fuel producer in southern Russia.

Amidst international efforts, including EU sanctions against Russia over its Ukraine conflict, U.S. Federal Reserve’s Mary Daly suggested caution in reducing interest rates prematurely, citing potential impacts on economic activity and oil demand.

Forecasts suggest a decline in U.S. crude oil stockpiles and gasoline stocks, with a likely increase in distillate inventories last week.