Oil prices showed marginal increases during Thursday’s early trade over demand uncertainties in the world’s largest oil-consuming country, the US, coupled with lackluster demand in the world’s largest importer, China.
International benchmark Brent crude traded at $79.53 per barrel at 10.27 a.m. local time (0727 GMT), a 0.09% gain from the closing price of $79.46 a barrel in the previous trading session on Wednesday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $75.43 per barrel, up 0.19% from the previous session’s close of $75.29 per barrel.
Price rises were aided by a weaker dollar, although a lower-than-expected decline in US crude oil stockpiles restrained additional price increases, as data reflected a slower rebound in US demand.
According to data released by the Energy Information Administration late Wednesday, US commercial crude oil inventories fell by around 700,000 barrels to 457.4 million barrels, less than the American Petroleum Institute’s expectation of a fall of 2.25 million barrels.
However, gasoline stockpiles fell by just 1.1 million barrels to 218.4 million barrels over the same period, providing some hope for the country’s summertime demand outlook.
A limited decline in the US dollar index, meanwhile, incentivized foreign currency holders to purchase cheaper crude.
The US dollar index, which measures the value of the American dollar against a basket of currencies, including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.23% to 99.94 early Thursday.
China’s domestic production has also expanded, and the country is importing oil at near-record levels. Despite sluggish domestic demand, China’s oil imports climbed 45.3% year over year in June to 12.67 million barrels, the second-highest monthly total on record.
The country also ranks fifth in the world with 4.3 million barrels of daily oil production.
Although rising imports in China are proving bullish for price trends, rising inventories signal weak demand, which will put downward pressure on prices.
