Investing.com - Oil prices traded higher on Monday as positive monthly data from China outweighed a slowdown in the country's growth rate in the second quarter, providing hopes that demand for oil will remain intact.
New York-traded West Texas Intermediate crude futures gained 16 cents, or 0.3%, to $60.37 a barrel by 7:38 AM ET (11:38 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., traded up 17 cents, or 0.3%, to $66.89.
Despite the fact that the Chinese economy registered its slowest growth in 27 years, better-than-expected increases in industrial output, retail sales and capital spending in June boosted hopes that the world’s second largest economy may be stabilizing.
With regard to the 6.2% growth seen in the second quarter, its slowest since the first quarter of 1992, analysts suggested that Beijing may also step up support measures that could be positive for oil.
Barani Krishnan, Investing.com’s senior commodity analyst, warned however that the “room for aggressive stimulus is limited by fears of adding to already high debt levels and structural risks.”
Krishnan also noted on Monday that it would be difficult to predict the impact of Tropical Storm Barry on oil prices. A key factor in last week’s rally, Barry reached hurricane status as it made landfall in Louisiana on Saturday, only to quickly weaken back to a tropical storm.
Apart from the precautionary shutdown of 1.4 million barrels per day of output, Krishnan noted that some crude was still awaiting refinement due to the idling of some local refineries.
“The reduced refining activity could raise U.S. crude stockpile balances on the Gulf Coast in the short-term, making it hard to match the previous week’s drawdown of 9.5 million barrels across the country,” he said.
“In that case, crude prices could fundamentally see a net loss and at least stay flat in the near term, to balance out some of last week’s 5% rally in West Texas Intermediate crude and 4% gains in Brent.”
In other energy trading, gasoline futures lost 1.4% to $1.9485 a gallon by 7:40 AM ET (11:40 GMT), while heating oil fell 0.4% to $1.9731 a gallon.
Lastly, natural gas futures traded down 1.8% to $2.409 per million British thermal unit.