Crude prices recover ground lost on Wednesday

London — Oil prices reclaimed some ground on Thursday after tumbling to a six-month low the previous day, though investors remained concerned about sluggish demand in the US and China.

Brent crude futures were up 76c, or 1%, to $75.06 a barrel at 9.24am GMT, while West Texas Intermediate was up 67c, also 1%, to $70.05.

“With the largest global importer of oil [China] shuttering its thirst for crude, pressure remains on prices as the largest producer, the US, continues with headline output,” PVM Oil analyst John Evans said.

On Wednesday the market was spooked by data showing US output remains near record highs even though inventories fell, analysts at ANZ said in a note.

US petrol stocks rose by 5.4-million barrels last week to 223.6-million barrels, Energy Information Administration data showed on Wednesday, far exceeding expectations for an increase of 1-million barrels.

Concerns about China’s economy also capped prices. Chinese customs data shows November crude oil imports fell 9% from a year earlier, as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.

While China’s total imports dropped on a monthly basis, exports grew for the first time in six months in November, suggesting the manufacturing sector may be beginning to benefit from an uptick in global trade flows.

Ratings agency Moody’s put Hong Kong, Macau and swathes of China’s state-owned firms and banks on downgrade warnings on Wednesday, just a day after issuing a downgrade warning on China’s sovereign credit rating.

Oil prices have fallen by about 10% since Opec and allies (Opec+) announced a combined voluntary output cuts of 2.2-million barrels a day for the first quarter next year.

Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman met to discuss further co-operation on oil prices on Wednesday, which may strengthen the market’s confidence in the impact of output cuts.

Opec+ member Algeria said on Wednesday it wouldn’t rule out extending or deepening supply cuts as oil prices fell to a new five-month low even though the group announced cuts last week.

Russian Deputy Prime Minister Alexander Novak said on Tuesday the group stood ready to strengthen oil production cuts in the first quarter of 2024 to eliminate what he said was speculation and volatility.

Russia has pledged to disclose more data about the volume of its fuel refining and exports after Opec+ asked Moscow for more transparency on classified fuel shipments from the many export points across the country, according to sources at Opec+ and ship-tracking firms.

Reuters