Oil prices steady as China reopening is balanced by economic concerns

A weaker US currency makes dollar-denominated commodities such as oil cheaper for buyers using other currencies

oil
Photo: Bloomberg
Reuters LONDON
2 min read Last Updated : Jan 24 2023 | 4:42 PM IST

By Noah Browning

LONDON (Reuters) -Crude oil prices were steady on Tuesday as concerns about a global economic slowdown and expected build in U.S. oil inventories were offset by hopes of a fuel demand recovery from top importer China.

Brent crude was down 30 cents, or 0.3%, at $87.89 a barrel by 1010 GMT. U.S. West Texas Intermediate (WTI) crude fell 35 cents, or 0.4%, to $81.27.

"The (United States) economy still could roll over and some energy traders are still sceptical on how quickly China's crude demand will bounce back this quarter," OANDA analyst Edward Moya said in a note.

This week traders are watching for more business data as corporate earnings season gathers momentum, offering clues to the health of economies around the globe.

On the inventory side, U.S. stocks of crude oil and gasoline were expected to have risen last week while distillate stocks were forecast to fall, a preliminary Reuters poll showed on Monday.

The poll was conducted ahead of reports from the American Petroleum Institute, due at 4:30 p.m. ET (2130 GMT) on Tuesday, and the Energy Information Administration, due at 10:30 a.m. (1530 GMT) on Wednesday.

Goldman Sachs analysts expect commodities such as crude oil, refined petroleum products, LNG, and soybeans to rise on the back of a rebound in Chinese demand.

Crude oil prices in physical markets have started the year with a rally on increased buying from China after the relaxation of pandemic controls and on trader concern that sanctions on Russia could tighten supply.

The dollar, meanwhile, hovered near a nine-month low against the euro and gave back recent gains against the yen as traders continued to gauge the risks of U.S. recession and the path for Federal Reserve policy.

A weaker U.S. currency makes dollar-denominated commodities such as oil cheaper for buyers using other currencies.

Investors have piled back into petroleum futures and options at the fastest rate for more than two years as concerns over a global business cycle downturn have eased, though flash PMI data due on Tuesday is expected to show a contraction.

(Reporting by Noah BrowningAdditional reporting by Mohi Narayan in New Dehi and Laura SanicolaEditing by David Goodman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :Oil PricesCrude Oil

First Published: Jan 24 2023 | 4:42 PM IST

Next Story