Oil down over bearish Chinese economic data

Oil prices were mixed on Tuesday amid demand woes after China posted its second-lowest annual economic growth figure in at least four decades.

International benchmark Brent crude traded at $84.44 per barrel at 10.26 a.m. local time (0726GMT), down 0.02% from the closing price of $84.46 a barrel in the previous trading session. This was despite a recent decision in the world’s second-largest economy to lift pandemic restrictions, boosting market sentiments for better oil demand.

The American benchmark West Texas Intermediate (WTI) traded at $79.34 per barrel at the same time, a 0.96% loss after the previous session closed at $80.11 a barrel.

While the oil market is awaiting much-expected reports from OPEC and the International Energy Agency later on Tuesday and Wednesday respectively, trading during the early sessions was mixed over bearish industrial data from China.

The largest oil importer in the world grew by 3% in 2022, which is less than half the 8.1% rate from the previous year, according to the official data.

After 2020, when growth dropped to 2.4% at the start of the coronavirus pandemic, China’s demand for oil recorded its second-lowest annual rate since the 1970s. China’s demand for oil has also decreased as a result of its “zero-Covid Policy,” which locked down millions of people and prompted protests.

However, the country’s latest move to remove these restrictions boosted market sentiments for bullish oil demand over the rest of the year.

“Nevertheless, investors are wary of upcoming sanctions on Russian oil products. From 5 February, the European Union and G7 will attempt to cap the price of Russia’s fuel exports. It will have to replace about 600kb/d of diesel imports,” Australia and New Zealand Banking Group Commodity Strategist Daniel Hynes said in an e-mailed note.

Source: Anadolu Agency