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Oil stable as investors ponder strong travel demand in China, rate hikes

Brent crude fell 3 cents to $82.70 a barrel at 0620 GMT, while US West Texas Intermediate crude also eased 3 cents to $78.73 a barrel

oil, crude, petroleum, crude oil, oil barrels

Photo: Bloomberg

Reuters SINGAPORE

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By Emily Chow
SINGAPORE (Reuters) -Oil prices were steady on Tuesday as investors weighed strong holiday travel in China that could boost fuel demand against the prospect of rising interest rates elsewhere, slowing economic growth.
Brent crude rose 4 cents to $82.77 a barrel at 0345 GMT, while U.S. West Texas Intermediate crude gained 6 cents to $78.82 a barrel.
Oil futures had risen more than 1% on Monday on optimism that holiday travel in China would increase fuel demand in the world's second-biggest economy.
Bookings in China for trips abroad during the upcoming May Day holiday point to a continued recovery in travel to Asian countries. Still, the numbers remain far off pre-COVID levels, with long-haul airfares soaring and not enough flights available.
"Investors expressed optimism that Chinese holiday travel would boost fuel demand in the world's largest oil importer," said Leon Li, an analyst at CMC Markets.
"In addition, expectations for a slowdown in U.S. gross domestic product growth in the first quarter prompted a pullback in the U.S. dollar index yesterday, supporting gains in oil prices."
A weaker U.S. dollar can help global demand for oil by making it cheaper for holders of foreign currencies in other countries.
However, investors remain wary about central banks in the United States, Britain and the European Union potentially raising interest rates to curb inflation, which could slow economic growth and dent energy demand.
The U.S. Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates when they meet in the first week of May.
Investors on Tuesday awaited industry data on U.S. oil stockpiles. Analysts polled by Reuters expected the data to show U.S. crude inventories fell by about 1.7 million barrels in the week to April 21. [API/S]
U.S. government data on inventories is due on Wednesday. [EIA/S]
(Reporting by Stephanie Kelly and Emily Chow in Singapore; Editing by Sonali Paul and Kenneth Maxwell)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Apr 25 2023 | 12:30 PM IST

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