Investing.com– Oil prices kept to a tight range in early Asian trade on Thursday as markets took stock of mixed demand signals from major world economies, while initial support from a Saudi production cut now appeared to be waning.
Oil pauses after volatile week
were flat at $76.86 a barrel, while steadied at $72.49 a barrel by 20:51 ET (00:51 GMT). Both contracts appeared to be stabilizing after wild swings this week.
Fresh production cuts by Saudi Arabia saw Brent and WTI futures briefly push to one-month highs on Monday.
But they swiftly reversed most gains, sinking for two consecutive sessions after a swathe of weak economic readings from the U.S. and Eurozone, which pointed to slowing business activity in both regions.
Crude prices then rose on Wednesday to settle at levels seen just before the Saudi cut, following mixed signals on demand from the U.S. and China.
Chinese oil imports rose sharply through May, data showed on Wednesday. But analysts attributed this more to local refiners increasing inventory amid weak prices, and that fuel demand in the Asian giant remained languid.
China’s also shrank more than expected, while its hit a 13-month low, indicating that the economy still faced a long road out of COVID-era lows. Wednesday’s data also followed mixed signals on local manufacturing activity, which is a key economic engine.
In the U.S., data showed that unexpectedly fell during the week to June 2. But and inventories, which are a key indicator of fuel demand, unexpectedly grew during the week. The build somewhat dented expectations for a sharp uptick in U.S. fuel demand in the run-up to the travel heavy summer season, which usually begins with the Memorial day weekend in late-May.
Fed, inflation data in focus
Market focus is now chiefly on a next week, amid uncertainty over whether the bank will hike interest rates. Surprise rate hikes from and brewed some fears of similar moves by the Fed, given that U.S. inflation and the labor market are still running hot.
The was boosted by recent bets on a hawkish Fed, which pressured oil prices. The prospect of a U.S. recession, amid high interest rates and inflation, has also weighed on crude markets this year.
and inflation readings are also due in the coming days, offering more economic cues on the world’s largest oil consumers. But while China is struggling with disinflation, the U.S. is instead attempting to bring down local inflation.
Read the full article here
