Oil prices rebounded on Tuesday as traders bet that China’s slowing economy will force more intervention and as attention moved to U.S. oil supply statistics.
China, the world’s largest oil importer, experienced a significant slowdown in economic development in the second quarter, according to data released during the previous trading session.
Brent and WTI both lost critical levels on Monday, falling from $80 per barrel to $75 per barrel, respectively.
Tuesday at 21:42 ET (01:42 GMT), Brent crude oil futures increased 0.2% to $78.69 per barrel, while West Texas Intermediate crude oil futures increased 0.3% to $74.28 per barrel.
The reinstatement of production at major Libyan oilfields also exerted pressure on crude markets, diminishing some bets that Libyan oil production would remain inactive for an extended period of time.
Economic Growth Dropped Despite Crude Export Remained Solid
China’s economic growth dropped in the second quarter compared to the first, according to data released on Monday. In the world’s largest oil importer, the post-COVID economic recovery appears to have lost momentum.
In spite of this, markets are currently pricing in the possibility of additional stimulus programs from Beijing, as the government steps to bolster economic growth.
According to local media reports, the People’s Bank of China may reduce reserve requirements for the third quarter, freeing up more liquidity to help the economy.
The last time the bank lowered its reserve requirement ratio was in March of this year, just a few months after the government loosened the majority of anti-COVID restrictions.
However, China’s petroleum imports have remained resilient despite a slowing economy.
Decline In Inventories
On Tuesday and Wednesday, respectively, the American Petroleum Institute and Energy Information Administration will release weekly inventory data for the United States.
After a significantly larger-than-anticipated buildup in the previous week, it is anticipated that the data will show a slight decline in inventories.
Last week, a key indicator of U.S. fuel demand disappointed markets by revealing a decline in gasoline consumption over the previous week, which was unusual for the typically demand-heavy summer season.