Brent Rises On Increased Demand From China
Brent crude oil made its way toward $86 on Tuesday morning following the release of data, which showed that Chinese demand had picked up.
The commodity traded at $85.87, still weighed down by oversupply concerns and worries about the global economy.
China’s implied oil demand rose to 10.3 million barrels per day in September, a 6.2-percent jump from August’s figures.
The data helped give crude prices a lift, as they indicated that the number two oil consuming nation’s appetite for crude is on the rise, but disappointing GDP figures mitigated Brent’s gains.
China’s economy grew at a better than expected pace of 7.3 percent in the third quarter, but the figure was much lower than the nation’s second quarter GDP growth of 7.5 percent.
Reuters reported that many analysts believe that China’s third quarter GDP, its weakest in almost six years, will keep Beijing from hitting its annual growth target for the first time in 15 years.
The poor Chinese GDP figures added to growing worries about the global economy and supported the International Energy Agency’s decision to trim its demand forecast for this year and next.
Meanwhile OPEC remains divided over whether or not to cut supplies in order to boost prices, though many members have signaled that the cartel will keep its output constant at its November meeting.
Instead of trying to push prices above $100 in order to balance their budgets, many nations are using lower prices in their 2015 budgets in order to prepare for depressed prices for an extended period.
Those who don’t support a supply cut are hoping that by accepting lower prices, they can gain market share.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.