By Adedapo Adesanya
Oil 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 lost 32 cents to $74.91 a barrel, while the US West Texas Intermediate (WTI) crude depreciated by 25 cents to $70.86 per barrel.
Chinese data showed that 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.
Industrial output grew 5.6 per cent in April from a year earlier, accelerating from the 3.9 per cent pace seen in March, data released by the National Bureau of Statistics (NBS) showed. It was well below expectations for around a 10.9 per cent increase.
On the other hand, retail sales, a gauge of consumption, jumped 18.4 per cent, up sharply from a 10.6 per cent increase in March for their fastest increase since March 2021. Analysts had expected a 21 per cent growth.
However, an 18.9 per cent year-on-year rise in China’s oil refinery throughput in April to the second-highest level on record helped steady oil prices.
US data showed that retail sales increased less than expected in April, pointing to consumers feeling the pinch from rising prices and interest rates.
Meanwhile, the IEA raised its forecast for global oil demand this year by 200,000 barrels per day to a record 102 million barrels per day.
It also said China’s recovery after the lifting of COVID-19 curbs had surpassed expectations, with demand reaching a record 16 million barrels per day in March.
The world’s top oil importer is set to account for nearly 60 per cent of global demand growth in 2023, offsetting, along with India and the Middle East, sluggish demand in developed countries.
The US and Brazil are projected to lead modest growth in oil supply of 1.2 million barrels per day for the year as the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ cuts agreed in April mean volumes from the producer group will fall 850,000 barrels per day from then through December, the IEA said.
Support came as the US 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 (SPR).
Additionally, widespread fires in the Canadian province of Alberta have shuttered at least 319,000 barrels of oil equivalent per day, representing 3.7 per cent of Canada’s production.
Global crude supplies could also tighten in the second half of the year as OPEC+ implements additional output cuts.