Oil prices rise after bruising losses in prior session

December 08, 2023 02:12 AM AEDT | By Investing
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Investing.com - Oil prices edged higher in early U.S. trading on Thursday, regaining some ground after slumping to a six-month low in the prior session, although concerns swirled around fuel demand in top importer China.

By 09:27 ET (14:27 GMT), the U.S. crude futures traded 1.2% higher at $70.49 a barrel, while the Brent contract climbed 1.2% to $75.19 per barrel.

Chinese customs figures showed that crude oil imports in November slipped by 9% compared to the same period last year, a reading that exacerbated fears over demand in the country and limited oil price gains.

A decision by rating agency Moody's (NYSE:MCO) to place a downgrade warning on China's credit rating outlook earlier this week has also dented investor sentiment. Moody's flagged increased risks to the world's second-largest economy from a property market meltdown, as well as a lack of clear policy support from the government.

Analysts quoted by Reuters added that markets were also worried by a higher-than-expected build in U.S. gasoline stocks, which hinted at faltering demand in the world's biggest oil consumer. U.S. gasoline futures slumped to a near two-year low after the data, which also showed a larger-than-anticipated draw in overall crude inventories over the week to Dec. 1.

Russian, Saudi leaders meet after OPEC+'s voluntary cuts underwhelm

On Wednesday, Russian President Vladimir Putin met with Saudi Crown Prince Mohammed bin Salman, with the two reportedly discussing further co-ordination between OPEC+ member states. Saudi Arabia and Russia have led the group of major oil producers in cutting supply throughout 2023 in an attempt to give support to crude prices.

Oil prices have slipped by around 10% since OPEC+, the common moniker of the Organization of the Petroleum Exporting Countries and its allies including Russia, announced output reductions last week. The cuts were only voluntary in nature for the group's members, leaving many traders skeptical of their ability to lift prices.

But while the OPEC+ announcement underwhelmed markets, it is still expected to help tighten crude markets marginally in the first quarter of 2024. Analysts expect Brent to trade in the low $80s in early-2024.

Ambar Warrick contributed to this report.

This article first appeared in Investing.com


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