Oil stability amid strong data for Chinese refineries and weak economic expectations

Oil prices stabilized on Thursday after a sharp decline on Wednesday, as the market balanced between a jump in refinery production in China, the world’s largest crude importer, and a weak economic outlook there.

Brent crude futures rose only three cents, or 0.04 percent, to $73.23 a barrel by 0903 GMT.

US West Texas Intermediate crude also increased by 1 cent, or 0.01 percent, to reach $68.28 a barrel.

Both benchmarks fell 1.5 percent on Wednesday.

The market got some support after data on Thursday showed that total Chinese oil refinery output in May jumped 15.4 percent from a year earlier, the second-highest on record.

But the weak economic outlook cast a shadow, as growth in China’s industrial production and retail sales in May missed expectations.

Oil’s gains were also limited by concerns that the expected interest rate hike would slow the economies of the United States and Europe and thus lower demand for crude.

The Federal Reserve kept interest rates unchanged on Wednesday, but indicated that they may still need to be raised by at least half a percentage point by the end of this year.

However, analysts expect oil prices to get some support later in the year as voluntary cuts by OPEC+ countries that began in May and additional cuts by Saudi Arabia from July coincided with the strong demand season.