Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Oil rally stalls on weak Chinese data, uncertainty over OPEC cut

Commodities Nov 30, 2022 09:37PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
LCO
-2.86%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
-3.49%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DXY
+1.22%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Ambar Warrick 

Investing.com-- Oil prices were muted on Thursday, cutting short a three-day rally after data highlighted growing economic cracks in major crude importer China, while markets also speculated over whether the OPEC’s last meeting for the year will result in a supply cut. 

Chinese manufacturing activity- a bellwether for the economy- weakened substantially in November, official and private surveys showed this week. This largely offset optimism over the country’s scaling back of some COVID-19 curbs in two major cities, following widespread protests. 

Beijing has also given no indication that it plans to scale back the lockdown measures that weighed heavily on China's economy this year, denting its appetite for crude. 

Brent oil futures were steady around $86.83 a barrel, while West Texas Intermediate crude futures were largely unchanged at $80.50 a barrel by 21:14 ET (02:14 GMT). 

Focus is now on an upcoming meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+) on Sunday. Markets are split over the cartel's capacity to cut supply further, after it slashed production by 2 million barrels per day in October.

The cartel recently signaled that it would consider recent weakness in oil markets during its upcoming meeting, but gave no direct signals that it will cut production. 

Still, crude prices rallied sharply in recent sessions after data showed U.S. inventories shrank substantially more than expected in the prior week. The reading showed that the U.S. government was now scaling back its drawdowns from the Strategic Petroleum Reserve, which likely heralds tighter oil supply in the world’s largest economy.

But while demand among refiners remained strong, a continued build in gasoline inventories showed that consumer demand for fuel remained weak amid high inflation and rising interest rates.

Weakness in the dollar also benefited oil markets this week, after Federal Reserve Chairman Jerome Powell signaled that the central bank will slow its pace of interest rate hikes in the coming months.

But Powell warned that interest rates will likely peak at higher-than-expected levels if inflation proves to be stubborn. 

The Fed’s Beige Book showed that the U.S. economy is losing momentum, while the outlook is paved with “increased pessimism,” heralding more uncertainty over oil demand in the country. 

The OPEC also recently forecast weakening crude demand in the near-term due to increasing economic uncertainty fueled by rising interest rates and high inflation. 

Oil rally stalls on weak Chinese data, uncertainty over OPEC cut
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Rubbing Hands
Rubbing Hands Nov 30, 2022 10:11PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
its build season for inventories and they pretend there is no demand. look at the eia 5yr graph and it will be clear.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email