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Oil steadies after big jump as U.S., Chinese economic cues loom

Oil steadies after big jump as U.S., Chinese economic cues loom
© Reuters.

Investing.com — Oil prices kept to a tight range in Asian trade on Thursday, retaining strong gains from the prior session as traders awaited more cues from key U.S. and Chinese economic data in the coming days.

Data showing a substantially bigger-than-expected draw in triggered a rally in oil prices on Wednesday, with the prospect of tighter supplies supporting markets as the travel-heavy summer season heats up.

But concerns over rising U.S. interest rates still kept sentiment in check, after Federal Reserve Chair Jerome Powell signaled that rates could still rise further this year. His comments pushed up the .

Economic readings from China are also expected to provide more cues to crude markets this week, as the world’s largest oil importer struggles with a slowing post-COVID economic rebound.

futures steadied around $74.03 a barrel, while futures fell slightly to $69.42 a barrel by 21:51 ET (01:51 GMT).

Focus is also on a next week, which comes after a series of surprise production cuts by the cartel to support oil prices this year.

U.S. GDP, Fed inflation figures set to provide more cues

A revised reading on first-quarter U.S. is set to offer up more cues on the world’s largest economy later on Thursday.

Cooling economic growth gives the Federal Reserve less headroom to keep raising interest rates, although the bank has signaled that it is willing to risk near-term economic headwinds as it moves to curb high inflation.

A reading on the – the Fed’s preferred inflation gauge – is also due on Friday, and is expected to show that inflation remained sticky through May.

Rising interest rates have pushed up concerns that economic growth will slow further this year, in turn weighing on oil demand.

China PMIs in focus

Oil markets were also awaiting key Chinese data on Friday for more cues on economic activity in the world’s largest oil importer.

, which is a key economic driver in the country, is expected to have contracted further in June, while are expected to have slowed as a post-COVID economic rebound ran dry.

Stimulus measures from the Chinese government, including recent cuts in interest rates, have done little to support growth so far.

A series of weak Chinese economic readings have largely undermined bets that an economic recovery in the country will drive oil demand to record highs this year.

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