Oil Steady Amid Weak China Data, U.S. Stockpiles in Focus
Oil was steady as traders assessed data highlighting continued weakness in the Chinese economy, and a drop in U.S. crude stockpiles.
Brent was little changed near $76 a barrel, after losing more than 1% on Wednesday even as crude inventories at the key Cushing, Oklahoma, hub hit their lowest since 2014. West Texas Intermediate was above $73.
China’s consumer inflation fell further toward zero, figures showed on Thursday, a setback for the government’s efforts to boost demand by injecting stimulus. Factory deflation in the world’s biggest crude importer continued for a 27th month.
Oil has made a strong start to 2025, despite widespread concerns that prices will fall this year amid expectations of a global supply glut. The rally that took Brent to its highest since mid-October on Wednesday has been driven by falling U.S. stockpiles, lower supplies from Russia and concerns that President-elect Donald Trump may step down once he takes office.
“I expect this volatility to continue until the inauguration,” said Wayne Gordon, regional chief investment officer at UBS Group AG, referring to the Jan. 20 handover. “The only thing we know is that he’s unpredictable.” Trump’s trade and security agenda could affect global oil markets. He has vowed to impose tariffs on all Canadian imports, potentially including crude shipments, while in the Middle East, his administration is also expected to tighten sanctions on Iranian flows.
In response, Canadian Energy Minister Jonathan Wilkinson warned against an oil trade war, saying retaliation is not out of the question. U.S. Midwest refineries are gearing up for heavy crude, which Canada supplies, he said.
Source: Bloomberg
