Brent Steady Despite Disappointing Chinese Data
Brent crude oil remained above $108 on Tuesday despite deteriorating global demand.
The commodity traded at $108.44 at 5:45 GMT as investors looked to Ukraine where the escalating conflict looked likely to continue worsening.
The relationship between the West and Russia deteriorated further on Monday after eurozone foreign ministers agreed to extend sanctions to several Russians tied to President Vladimir Putin as well as two Crimean energy companies. The sanctions, designed to isolate Moscow economically, may not be the last. Many see an imminent threat of further sanctions as the crisis drags on.
Brent prices have found support from the problems in Ukraine as the nation’s unrest could potentially interrupt energy supplies from Russia. However, the commodity has been resistant recently as more sanctions and eastern Ukraine’s secession vote had already been factored into the price. The commodity will likely stay put until there is a real threat to Russian supplies.
Meanwhile, WTI prices gained support from a Reuters poll which showed that analysts expect data to show that US crude inventories remained unchanged at 397.6 million barrels last week. The weekly report containing those figures from the American Petroleum Institute is due out later on Tuesday, followed by the Energy Information Administration’s version on Wednesday.
Demand has been a problem for Brent as a slowdown in China, the world’s second largest consumer, has depressed the global demand outlook. On Tuesday, both industrial output and retail sales figures came in below expectations, which added to the growing list of disappointing Chinese economic indicators.
Over the weekend, President Xi Jinping warned that the nation must adjust to its slower pace of growth, indicating that Beijing is not planning to intervene with stimulus measures any time soon.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.