Oil steadies as China stimulus moves vie with demand concerns

Oil held a gain as China announced measures to boost its stock and property markets, helping offset concerns about increased supply and monetary tightening in the US and Europe.

West Texas Intermediate traded around $80 a barrel after closing 1% higher on Friday. The US benchmark fell over the previous two weeks on speculation the US could ease sanctions on Iran and Venezuela, boosting supply, and a deteriorating demand outlook in China, the world’s biggest oil importer.

The rally at the end of last week came after a string of declines that left futures trading near where they started the year, despite the efforts of OPEC+ producers Russia and Saudi Arabia to shore up prices by curbing supply. Meanwhile, the world’s top central bankers stressed the need to keep interest rates high until inflation is contained at a gathering in Jackson Hole, Wyoming.

Federal Reserve Chair Jerome Powell’s speech at Jackson Hole hinted that the central bank would take no action at its September meeting, which helped lift oil prices, said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore.

“News of Chinese stimulus has provided further support,” he said. Still, “prices are likely to remain range-bound in the short term, with lingering demand concerns and stronger supply.”

Prices:
WTI for October delivery was steady at $79.79 a barrel at 11:50 a.m. in Singapore. Brent for October settlement slipped 0.1% to $84.40 a barrel.

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