Singapore, Feb. 28 (BNA): Oil prices were steady in Asian trade on Tuesday, supported by hopes that a strong economic recovery in China will increase demand for fuel, easing concerns about higher US interest rates that could hurt demand in the world’s largest economy. .
Brent crude futures for April, due to expire on Tuesday, were up 14 cents at $82.59 a barrel by 0443 GMT. And the most active May contract rose 17 cents to $82.21 a barrel.
US West Texas Intermediate crude futures rose 21 cents to $75.89 a barrel, Reuters reported.
Brent and WTI futures were both on track for monthly losses of around 2.2% and 3.8%, respectively, and WTI is likely to experience a four-month series of declines.
Expectations of a demand recovery in China fueled the gains, with the market awaiting key data over the next couple of days. Economists polled by Reuters expected factory activity in the world’s second-largest economy to grow in February.
“China’s economic recovery will push its demand for commodities higher with oil positioned for maximum benefit,” JPMorgan analysts said in a client note.
Oil analysts at JPMorgan maintained their average forecast for 2023 for Brent crude futures at $90 per barrel.
However, the threat of a US rate hike after stronger-than-expected new orders for US-manufactured core capital goods in January limited gains, with US Federal Reserve Governor Philip Jefferson saying services inflation remained “stubbornly high”.
“Stronger-than-expected inflation numbers have raised concerns about further interest rate increases, which has already dampened demand in the US,” ANZ analysts said in a note to clients.
The market will be watching the latest US oil inventories data due from the American Petroleum Institute industry group on Tuesday and the Government Energy Information Administration on Wednesday for more indications of demand.
A preliminary Reuters poll showed that analysts expected crude inventories to grow by 400,000 barrels in the week ending February 24, which would mark the tenth consecutive week of increase.
Seven analysts polled estimated that gasoline stocks rose by about 700,000 barrels. Distillate stocks, which include diesel and heating oil, were expected to have fallen by about 500,000 barrels last week.
OANDA analyst Edward Moya said in a note that any signs of improving demand would provide a catalyst to send WTI higher last week at $77.51.