Crude oil recovered yesterday’s losses after China’s data showed crude imports by the world`s second largest consumer rose in April; gains however are limited as worries over the faltering global demand persist following the U.S. API data.
China’s net crude imports rose to the highest in three months in April. “China`s oil demand will continue to grow as the country gets wealthier, but their growth is getting offset by the slowdown in demand in the wealthy nations”, said Tony Hunan from Mitsubishi.
Yet worries over the weakening global demand persist. U.S. crude inventories climbed for a second week by 680,000 barrels last week, the American Petroleum Institute said yesterday, while the EIA later in the day may show supplies rose two million barrels.
"The outlook is going to remain muted for the U.S. for consumption of oil. There is also U.S. domestic supply, which continues to grow," said David Lennox from Fat Prophets, Sydney.
- Crude oil is trading around the $95.85 a barrel level compared with the opening at $95.53, while the highest is at $95.94 and the lowest is at $95.36
- Brent is trading around $104.58 a barrel after rising 0.17% or $0.18
And while the EIA cutting its forecast for demand growth for this year to 890,000 bpd, a reduction of 70,000 bpd from last month`s forecast, is weighing on prices, the continued tensions in the Middle East still give support.
“We are going to see wide swings in prices… because fundamentally the market is extremely bearish while geopolitical concerns are providing support”, Tony Hunan added.
- Natural gas is trading at $3.90 per cubic feet after falling 0.51%
- Gasoline is trading at $2.8305 a gallon after falling 0.10%
- Heating oil is trading at $2.9276 a gallon after falling 0.01%