Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil prices muted after mixed Chinese data, OPEC meeting awaited

Published 03/30/2023, 10:07 PM
Updated 03/30/2023, 10:42 PM
© Reuters.

© Reuters.

By Ambar Warrick

Investing.com -- Oil prices moved little on Friday as Chinese business activity data offered mixed economic cues on the world’s largest crude importer, while markets also awaited fresh direction from an OPEC meeting next week.

Chinese purchasing managers’ index (PMI) data showed that manufacturing activity slowed in March from the prior month, albeit at a smaller-than-expected pace, while non-manufacturing activity grew at its fastest pace in 12 years. Still, weakness in factory activity - which acts as a bellwether for the Chinese economy - raised some concerns over commodity demand in the country.

Chinese factories are grappling with a pronounced slowdown in offshore export demand, amid deteriorating global economic conditions.

Overall business activity in China rose at its fastest pace in 15 years, indicating that a post-COVID economic recovery was still on track, albeit at an uneven pace. While oil bulls are betting on a Chinese recovery to drive crude demand to record highs this year, recent data suggests that such a scenario may take longer to play out than initially expected.

Brent oil futures fell 0.1% to $78.56 a barrel, while West Texas Intermediate crude futures were flat at $74.41 a barrel by 22:40 ET (02:40 GMT). Both contracts were up sharply this week, between 4% and 8%, as they bounced back from a 15-month low hit earlier.

Signs of tightening supply also aided crude prices this week, as legal disputes saw crude exports from Iraqi Kurdistan halted, while U.S. inventories fell sharply amid signs of a pickup in refiner demand.

Focus is now on a meeting of the Joint Ministerial Monitoring Committee of the Organization of Petroleum Exporting Countries (OPEC) on Monday, for any more cues on future production cuts. While OPEC ministers had vowed to stabilize markets after oil prices crashed earlier this month, recent media reports suggested that the cartel intends to keep production steady.

Crude prices were set to lose between 4% and 5% in the first quarter of 2023, as fears of slowing economic growth and a potential banking crisis severely dented the prospect of demand remaining steady this year.

The collapse of several U.S. banks drummed up concerns over an imminent recession, as did weak economic indicators from across the globe.

While intervention by regulators stemmed fears of a bigger crisis, markets still remained wary of any economic scars left over from the banking collapse.

Latest comments

PMI was 51.9. is this author on drugs or just biased
The author states PMI slowed. PMI increased at 51.9. What nonsense is this author making up. Don't believe me just click on the link in the article. Biased authors getting paid to spam...
You are correct, sir! Seems that many of the authors on this site are full of misinformation. Where the heck are the misinformation police when you need them?
They always seem to be against oil for some reason every bullish factor is suppressed they always highlight the bearish news.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.