Hong Kong, Oct. 25 (BNA): Oil prices rose on Tuesday with the US dollar slipping against its major peers, but gains were limited by fears of slowing global demand growth for fuel amid bearish economic data from major oil-importing economies such as China.
International benchmark Brent crude futures rose 27 cents to $93.53 a barrel by 0415 GMT, after falling 0.3% in the previous session. US West Texas Intermediate crude futures for December delivery rose 36 cents to $84.94 a barrel, after a previous decline of 0.6%.
The US dollar index fell in early trading, making dollar-denominated oil less expensive for other currency holders and helping lift prices, according to Reuters.
However, signs of uncertain economic activity in the United States and China, the world’s two largest oil consumers, limited the increase.
“Regardless of intraday price fluctuations, Brent and WTI futures have been stuck in a relatively narrow range since Thursday,” said Vandana Hari, oil market analyst Vanda Insights.
Harry added that the fundamentals of supply and demand remain largely stable, leaving economic sentiment center stage for the oil market.
“A lot of the deteriorating demand outlook has already been absorbed, so any additional downward pressure could be slow,” she said.
US business activity contracted for a fourth month in October, as manufacturers and service firms said in a monthly S&P Global Purchasing Managers survey published Monday that customer demand is falling.
This weakness may indicate that the US Federal Reserve’s interest rate increases to fight inflation have been successful and may convince it to slow down its rate hike policies, which is a positive sign for fuel demand.
Also on Monday, government data showed that China’s imports of crude oil in September fell 2% from a year earlier, continuing the trend of falling imports at the same time it reported slowing retail sales.
US crude oil inventories are also expected to rise this week, which could limit price gains. Analysts polled by Reuters estimated on average that crude stocks rose 200,000 barrels in the week to Oct. 21.
Analysts estimated that gasoline stocks fell by 1.2 million barrels and distillate stocks, which include diesel and heating oil, are expected to have fallen by 1.1 million barrels last week.
HF