Oil futures dipped on Tuesday as weaker-than-expected economic data in China and the United States offset a forecast of higher global demand from the International Energy Agency (IEA).
Brent crude futures were down by 30 cents to $74.93 a barrel by 12:57 p.m. while U.S. West Texas Intermediate crude edged down 22 cents to $70.89.
Both benchmarks rose more than 1% on Monday, reversing a three-session losing streak.
Reuters reports that weighing on prices on Tuesday was Chinese data showing industrial output and retail sales growth undershot forecasts in April, suggesting the world’s second-largest economy lost momentum at the start of the second quarter.
However, an 18.9% year-on-year rise in China’s oil refinery throughput in April to the second-highest level on record helped to keep a floor under crude prices.
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“There has been a lot of concern about China’s industrial numbers, but if you look at their actual demand numbers or refinery runs, they’re knocking on the door of breaking records,” said Phil Flynn, an analyst at Price Futures Group.
With refiners building stockpiles ahead of the summer travel season in the northern hemisphere, crude imports by China in May are moving towards 11 million barrels per day, versus 10.67 million bpd in April, Refinitiv Oil Research said.
China’s June refinery intake is expected to grow by 1.5% month on month, data compiled from Wood Mackenzie showed.
U.S. data showed that retail sales increased less than expected in April, pointing to consumers feeling the pinch from rising prices and interest rates.
The IEA raised its forecast for global oil demand this year by 200,000 bpd to a record 102 million bpd. It said China’s recovery after the lifting of COVID-19 curbs had surpassed expectations, with demand reaching a record 16 million bpd in March.
In another bullish development, the U.S. Department of Energy on Monday said it would buy 3 million barrels of crude oil for delivery in August in a move to begin refilling the Strategic Petroleum Reserve.