Oil rose gradually in Asian trade on Tuesday as investors keep an eye on a possible tightening in US crude supplies, after falling amid weaker-than-expected economic growth in the previous session in China.
Brent crude was up 10 cents at 0630 GMT to $78.60 a barrel, while West Texas Intermediate crude (WTI) rose 14 cents to $74.29 a barrel.
Both contracts fell more than 1.5% on Monday.
US crude oil product stocks fell last week. Market participants had been waiting for industry API data on Tuesday, which is expected to show US crude inventories and product inventories dropped over the past week.
Some analysts estimate that US crude inventories fell by about 2.3 million barrels in the week to July 14.
China’s GDP grew 6.3% year-on-year in the second quarter, compared to analysts’ estimates of 7.3%, as its post-pandemic recovery momentum lost its momentum.
China’s weak growth makes it urgent for policy support. The sluggish gross domestic product (GDP) data from China released on Monday prompted a cautious stance on prices, with some reservations about a recovery in demand.
Still, there has been some interest from buyers recently as prices climbed above the near-term consolidation pattern last week, which may indicate that the selling pressure has eased somewhat after last year’s negative mood.
Meanwhile, US shale oil production is forecast to fall to about 9.40 million barrels per day in August, marking the first monthly drop since December 2022, according to data from the Energy Information Administration (EIA) released Monday.
Still, global supply could see an increase as production resumes at two of the three Libyan sites that were shut down last week. Production had been halted due to a protest against the kidnapping of a former finance minister.
Demand-side concerns combined with potential upside supply tightening make prices likely to remain flat in the short term.
