Oil prices maintain their gains supported by optimistic Chinese trade data

Oil prices stabilized on Thursday, maintaining the gains achieved on Wednesday fueled by optimistic Chinese trade data and a smaller-than-expected increase in US crude inventories alongside a significant drawdown in fuel inventories. However, the market was tempered by expectations of delayed interest rate cuts in the United States, limiting the gains.

Brent crude futures dipped four cents to $82.92 per barrel by 0432 GMT, while US West Texas Intermediate crude futures slid one cent to $79.12 per barrel. The move followed data showcasing Chinese imports and exports surpassing expectations.

Independent analyst Tina Ting, based in Auckland, remarked that China’s robust trade balance data signaled a positive outlook for oil demand. However, she noted a prevailing sentiment of risk aversion in financial markets, with Wall Street stocks seeing declines.

Chinese customs data revealed a 5.1 percent surge in imports, reaching approximately 10.74 million barrels per day in the first two months of 2024 compared to the previous year. This uptick came as refinery companies escalated crude purchases to meet heightened fuel demands during the Lunar New Year holiday.

The trade data from China, the world’s second-largest economy, reflects an improvement in global trade and provides a positive signal to policymakers amid a protracted slowdown in the manufacturing sector that had weighed on the economy.

On Wednesday, Brent and West Texas Intermediate crude oil both rose around 1 percent following the news of the sixth consecutive weekly increase in US crude inventories.