Oil prices rise in response to anticipated demand as the economy improves
Wednesday saw an increase in oil prices due to a stronger economic outlook and expectations of stable demand in the two biggest oil consumers in the world, China and the United States.
By 0105 GMT, Brent crude futures were up 29 cents, or 0.42%, to $69 a barrel. At $66.92, U.S. West Texas Intermediate oil futures were up 40 cents, or 0.6%.
Following threats of taxes on purchases of Russian oil by U.S. President Donald Trump, the market discounted the possibility of supply interruptions, which ended two days of falls.
Prices have fluctuated within a very narrow range as worries that U.S. tariffs on its trading partners will impede economic development and gasoline consumption have clashed with indications of stable demand from a rise in travel throughout the Northern Hemisphere summer.
Though Chinese data indicated growth remained steady, major oil producers are pointing to an improvement in economic development for the second half of the year.
“Strong seasonal demand is currently providing upward momentum to oil prices, as summer travel and industrial activity peak,” a note from LSEG stated.
“Increased gasoline consumption – especially in the U.S. during the Fourth of July holiday period – has signaled robust fuel demand, helping offset bearish pressures from rising inventories and tariff concerns.”
Growth dropped in the second quarter, according to China statistics, although not as much as had been anticipated, partly due to frontloading to avoid U.S. tariffs. This reduced some of the worries about the economy of the biggest importer of crude in the world.
According to the data, China’s crude oil throughput increased by 8.5% in June compared to the same month last year, suggesting a larger demand for fuel. According to consultants, that was the highest since September 2023, when state-owned refineries expanded their operations and enjoyed a comeback in profit.
In a monthly report released on Tuesday, the Organization of Petroleum Exporting Countries (OPEC) also predicted that the world economy will improve in the second half of the year, improving the outlook for oil consumption.
According to the survey, the U.S. and EU are rebounding from last year, while Brazil, China, and India are exceeding forecasts.
