Oil Rises as Growing Demand in China Calms Rate-Hike Concerns

by Bloomberg | Chunzi Xu, Alex Longley
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*this article was not written by Roseland Oil & Gas

Oil rose as strengthening demand in China outweighed concerns over further interest rate hikes in the US.

West Texas Intermediate futures approached $71 a barrel on Thursday, a one-week high. China this week issued larger crude-import quotas than a year earlier, and a stimulus package the nation is considering raised hopes for higher demand. While the pace of growth lagged the expectations of some market participants, it was enough to offset the Federal Reserve’s warning of higher-than-expected borrowing costs.

“A little good news from China can go a long way for oil prices given that has been the focal point for demand,” said Stacey Morris, head of energy research at VettaFi. 

Still, renewed recession worries are showing up in futures’ time spreads. Brent’s prompt spread flipped into contango, and WTI’s contango widened to its most bearish since February. Swelling crude inventories at the storage hub in Cushing, Oklahoma, which have reached the highest since June 2021, are adding to the bearish sentiment.

US crude futures have lost 12% this year and drifted sideways in a narrow range since early May as concerns over a potential US slowdown and a lackluster rebound in China’s economy wrestle with Saudi-led supply cuts. China’s apparent oil demand last month rose 17% from a year ago, while industrial output also edged higher, according to official data released on Thursday.

by Bloomberg | Chunzi Xu, Alex Longley
click here to read to read the original article
*this article was not written by Roseland Oil & Gas