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Investing.com-- Oil prices rose in Asian trade on Thursday as a sustained drop in U.S. inventories spurred some optimism over sustained demand in the world’s biggest fuel consumer.
Bargain buying also aided oil prices, as they rebounded from multi-month lows in the prior session.
But this rebound now appeared to be running out of steam, with further gains in crude stymied by dismal economic data from top oil importer China, especially on its crude imports.
Brent oil futures rose 0.3% to $78.59 a barrel, while West Texas Intermediate crude futures rose 0.4% to $77.98 a barrel by 21:26 ET (01:26 GMT). Both contracts were nursing sharp losses in recent sessions amid concerns that a potential U.S. recession will batter oil demand.
US inventories shrink more than expected, but products grow
U.S. oil inventories shrank 3.7 million barrels in the week to August 2, dropping for a sixth straight month and also falling more than expectations for a draw of 1.6 million barrels.
The reading sparked some hopes of tighter U.S. markets, especially as demand picked up over the past two months in the travel-heavy summer season.
But builds in gasoline and distillate inventories indicated that fuel demand may now be cooling after a strong summer.
Energy Information Administration data also showed U.S. oil production hit a record high of 13.4 million barrels per day last week. The EIA also forecast that global oil demand will grow at a slower pace than initially expected.
China oil imports drop in July as growth concerns mount
China imported around 10 million barrels of oil in July, down 12% from June and 3% lower than the same period last year, government data showed on Wednesday.
The drop in imports came amid weaker fuel demand and lower refining margins.
But the weak import data was also preceded by a string of soft economic readings from China, which added to concerns over slowing growth in the world’s biggest oil importer.
Concerns over China, coupled with fears of a U.S. recession, were the biggest weight on oil prices in recent sessions.
Concerns over demand saw traders attach little risk premium to oil prices despite the prospect of a bigger war in the Middle East, as tensions rose between Israel and Iran.
