Oil edged higher as investors weighed the outlook for demand following some measures by China to support its ailing property market.
(Bloomberg) — Oil edged higher as investors weighed the outlook for demand following some measures by China to support its ailing property market.
West Texas Intermediate traded above $73 a barrel after closing 1.2% lower in the previous session, the most in a week. Authorities stepped up pressure on banks to ease terms for property companies by encouraging negotiations to extend outstanding loans. Top state-run financial newspapers on Tuesday ran reports flagging the likely adoption of further supportive policies.
China’s sluggish economic recovery, along with monetary tightening by central banks and resilient crude flows from producers including Russia and Iran have provided headwinds for oil this year. That’s prompted OPEC+ heavyweights Saudi Arabia and Russia to cut supply to prop up prices.
Traders will be watching the consumer price index read on Wednesday for clues on the path forward for interest rates, and monthly reports from OPEC and the International Energy Agency on Thursday for snapshots of the oil market. Ahead of those releases, the US will provide its Short-Term Energy Outlook.
“Saudi cuts and expectations of further support measures for the Chinese property sector appear to be providing a more solid floor to the market,” said Warren Patterson, head of commodities strategy for ING Groep NV. “The US CPI release tomorrow will be key for price direction in the near term, with it shaping market expectations on Fed policy in the months ahead.”
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