Tuesday saw little movement in oil prices as positive economic statistics from China, the world’s second-largest oil consumer, outweighed broader worries that potential hikes in U.S. interest rates may slow growth in the world’s largest oil user.
By 11:15 a.m. ET (1515 GMT), Brent crude was unchanged at $84.76 per barrel, while U.S. West Texas Intermediate was 12 cents, or 0.2%, higher at $80.95.
The possibility of another interest rate increase next month, according to Dennis Kissler, senior vice president of trading at BOK Financial, “is growing.
The Kurdistan Regional Government (KRG) and the federal government of Iraq exerted pressure on crude by moving to resume northern oil exports through the Turkish port of Ceyhan after they were suspended last month.
In the earlier part of the day, data indicating that China’s GDP expanded by a faster-than-anticipated 4.5% in the first quarter and that oil refinery throughput increased to record levels in March helped to bolster the price of oil.
To the satisfaction of many who had gambled on rising oil prices, Stephen Brennock of oil broker PVM stated, “As things stand, China is operating normally.
However, the likelihood of another rise in interest rates in the United States, which has been boosting the dollar’s value, continued to dampen the mood. Traders anticipate a 25 basis point rate increase from the US Federal Reserve at its meeting in May.
Craig Erlam of brokerage OANDA discussed the prognosis for oil prices. “The next step may depend on global growth and whether the economy can weather the recent storm, particularly in the U.S., where tighter credit could significantly weigh on growth for the rest of the year,” he said.
Tuesday saw a decline in the dollar after earlier advances. For buyers using foreign currencies, a stronger dollar raises the price of commodities priced in the US currency.
On Tuesday, the most recent inventory report for the United States will be in the spotlight. Analysts predict that the country’s crude stockpiles will drop by roughly 2.5 million barrels, and petrol and distillates prices will also drop.
The first of this week’s two reports, from the American Petroleum Institute, is due at 4:30 p.m. ET (2030 GMT).