ANKARA
Oil prices were mixed in early trade on Tuesday as investors gauged the risks associated with China’s less-than-expected interest rate cut decision, which prompted doubts about the country’s post-COVID recovery.
International benchmark Brent crude traded at $76.33 per barrel at 10.37 a.m. local time (0737 GMT), a 0.31% gain from the closing price of $76.09 a barrel in the previous trading session on Friday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $71.58 per barrel, down 0.48% from the previous session’s close of $71.93 per barrel.
The world’s second-largest oil-consuming country, China, decided to cut two benchmark interest rates in a bid to boost its faltering economic recovery.
The decision came amid conflicting data flows about China’s industrial and economic growth and the country’s decision to increase stimulus to help its weakening economy.
According to China’s National Bureau of Statistics (NBS), industrial output fell short of expectations with a growth rate of 3.5% in May from a year earlier, slowing from the 5.6% expansion in April.
Offsetting demand concerns, China’s oil refinery output reached a new high in May, up 15.4% over the previous month.
Following the US Federal Reserve’s decision last week to keep the federal funds rate constant, investors are now focusing on the country’s fight against increasing inflation, counter-moves, and data suggesting the economic trajectory.
US commercial crude oil inventories, a significant demand indicator in the world’s largest oil-consuming country, increased by 7.9 million barrels, reflecting demand weakness.
However, demand for gasoline showed a decline ahead of peak travel months, as inventories grew by around 2.1 million barrels to 220.9 million barrels.
