Oil prices inched higher on Thursday on news of positive economic data from China, the world’s largest crude oil importer.
Brent crude oil climbed by 0.51% to $84.74 a barrel, while U.S. West Texas Intermediate (WTI) crude oil rose by 0.58% to $78.14.
China’s manufacturing activity grew at its fastest pace in over a decade last month, indicating a strong rebound in the country’s economy after the lifting of COVID-19 restrictions. Also, reports from the world’s second-largest economy revealed that seaborne imports of Russian oil are expected to hit a record high in March as refiners are expected to take advantage of lower prices.
However, gains in the oil market were tempered by concerns over the potential impact of rising interest rates in Europe. The European Central Bank (ECB) is expected to increase interest rates due to an acceleration in consumer prices in France, Spain, and Germany. The euro zone inflation rate also rose higher than expected in February.
According to Tamas Varga, an analyst at PVM Oil, “Resurfacing inflation worries contributed to the souring mood. Persistent inflation anxiety will act as a break on a prolonged rally in the immediate future.”
In the United States, crude stock builds continued for the tenth consecutive week, but record exports of U.S. crude oil helped keep the build smaller than in previous weeks, according to the Energy Information Administration.
Overall, while positive economic data from China provided some support for oil prices, concerns over potential interest rate hikes in Europe and ongoing crude stock builds in the U.S. kept gains in check.
