Oil prices hold firm despite mixed signals

17 Jul 2024 , 10:51 AM

Oil prices remained steady on Wednesday, with global benchmark Brent holding near its one-month low from the previous session, as hints of slowing demand growth in China clashed with the likelihood of reducing US oil stockpiles.

Brent crude oil futures were down 4 cents to $83.69 a barrel. U.S. West Texas Intermediate crude futures were also down 4 cents to $80.72.

Both benchmarks fell in the previous three days, with Brent oil futures trading as low as $83.30 on Tuesday, their lowest since June 17.

China, the world’s largest oil importer, saw its economy expand by 4.7% in the second quarter, according to official figures released earlier this week, the weakest growth rate since the first quarter of 2023.

Crude oil stocks in the United States, the world’s top producer and consumer, declined by 4.4 million barrels in the week ending July 12, according to market sources quoting American Petroleum Institute statistics.

Reuters polled analysts, who predicted a 33,000-barrel drop in petroleum stocks. At 1430 GMT, the US Energy Information Administration will release its official storage report.

Supporting oil prices, retail sales were steady in June as a decline in auto dealership receipts was offset by wide strength elsewhere, demonstrating consumer resilience and boosting economic growth predictions for the second quarter.

Meanwhile, experts at Growmark Energy believe that increased geopolitical risk is helping to prevent oil price decreases.

On Tuesday, the Red Sea and Gulf of Aden Joint Maritime Information Centre (JMIC) reported that a Liberian-flagged oil tanker was inspecting damage and investigating a potential oil spill after being assaulted by Yemen’s Houthis in the Red Sea.

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