LONDON, Jan 3 (Portal) – Oil prices fell in volatile trading on Tuesday, as weak demand data from China and a gloomy economic outlook weighed.
Brent crude futures were down 46 cents, or 0.54%, at $85.45 a barrel by 1017 GMT. US West Texas Intermediate crude fell 38 cents, or 0.47%, to $79.88.
Both contracts are up over $1 and Brent is down $1 in earlier trade.
“Brent and WTI have rebounded almost 15% from the lows a few weeks ago as traders continue to price in stronger Chinese demand,” said Craig Erlam, senior market analyst at OANDA.
“However, the outlook remains highly uncertain, which should keep oil prices very volatile,” Erlam added.
The Chinese government has raised export quotas for refined oil products in the first batch for 2023. Traders attributed the rise to expectations of weak domestic demand as the world’s largest crude oil importer continued to grapple with waves of COVID-19 infections.
In more bearish news, China’s factory activity shrank in December as rising COVID-19 infections disrupted production and weighed on demand after Beijing largely eased anti-virus restrictions.
Adding to the bleak economic outlook, IMF Managing Director Kristalina Georgieva said Sunday that the United States, Europe and China — the main engines of global growth — were all slowing at the same time, making 2023 more difficult for the global economy than 2022.
The market will be on the lookout for any clues from the US Federal Reserve’s December monetary policy meeting on Wednesday. The Fed hiked rates by 50 basis points (bps) in December after four straight hikes of 75 bps each.
Also on the radar is US December jobs data, due out on Friday, which should show the job market remains tight.
Reporting by Florence Tan and Trixie Yap in Singapore; Additional reporting by Chen Aizhu and Muyu Xu; Editing by David Evans
Our standards: The Trust Principles.