Crude oil prices increased Wednesday, brushing aside concerns of weakening fuel demand in the world's second-largest oil-consuming country after new economic data signaled that China’s recovery was underperforming.
West Texas Intermediate (WTI) was shot up by 0.9% to $83.7 per barrel as of 2:12 pm GST Wednesday, hitting its highest level since November 2022 at $83.91 during intraday trading. Brent Crude futures, which touched a peak of $87.09 in the intraday session, gained 0.7% to $86.81 a barrel around the same time.
Both oil benchmarks recovered Tuesday from Monday’s downward turn, with WTI ending the session with a 1.2% jump to $82.92 and Brent climbing nearly 1% to $86.17 a barrel.
On Monday, prices lost steam, with WTI and Brent closing the session with a more than 1% fall each to $81.94 and $85.34 per barrel, respectively.
Oil price movement in earlier trades Wednesday showed signs of decline after new data showed China slipped into deflation in July, with consumer prices falling 0.3% on an annual basis.
The latest consumer price index (CPI) reading added to worries that China’s post-pandemic recovery has lost its momentum as deflation could indicate weakened domestic consumption.
Oil was also under pressure on Tuesday, owing to Chinese data that revealed the country’s oil imports dwindled by 18.8% in July compared to June, with crude shipments into China reaching 43.7 million metric tons, or 10.3 million barrels per day (bpd).
However, China’s lackluster economic data was still outweighed by a tighter global oil supply as a result of production cut pledges from top oil producers, Saudi Arabia and Russia. The output cut announcements have supported the upward movement of oil in the past weeks as Saudi and Russia remain firm on their objective to bring stability to the market.
