Oil rose as the dollar fell and traders awaited data from the US Energy Information Administration.
(Bloomberg) — Oil rose as the dollar fell and traders awaited data from the US Energy Information Administration.
West Texas Intermediate futures climbed above $72 a barrel — erasing an earlier loss — as a weaker dollar made commodities priced in the US currency more attractive for buyers. Strong Chinese crude imports in May and Saudi Arabia’s recently announced July supply cut also supported oil prices.
Oil has lost around 10% this year amid concerns about China’s recovery and a rapid increase in interest rates by the US Federal Reserve. Russian crude flows also remain high, even after the nation said it would reduce output.
China’s crude oil imports topped 12 million barrels a day in May, part of a wider set of strong commodity data. That said, its trade exports fell by more than expected, adding to growth concerns.
The outlook for the Chinese economy is key for oil markets, according to the International Energy Agency’s executive director Fatih Birol.
“There are many uncertainties, as usual, when it comes to the oil market, and if I have to pick the most important one it’s China,” Birol said in an interview with Bloomberg TV on Wednesday. “Of more than 2 million barrels a day of growth we expect this year in global oil demand, 60% is set to come from China.”
The global economy is set for a weak recovery from the shocks of Covid-19 and Russia’s war in Ukraine, the Paris-based OECD said Wednesday.
Official figures from the Energy Information Administration are due later, following an industry group report that showed a decline in US crude inventories.
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