Oil was steady below $71 a barrel today ahead of US data expected to show a fall in gasoline stocks, with weaker-than-expected Chinese economic data acting as a drag.
China reported below-forecast growth in factory output and investment today, underlining why senior officials keep reminding markets that recovery in the world's third-largest economy is not yet on solid ground.
But the slowing growth in factory output didn't seem to dampen the country's demand for crude oil imports, which jumped 42 per cent on year in July to a record 4.62 million barrels per day as refiners boosted exports and cashed in on retail prices hikes in June.
US light crude for September delivery rose 4 cents to $70.64 a barrel by 5.43am, having settled down 33 cents yesterday at $70.60 a barrel as it tracked Wall Street losses.
London Brent crude fell 15 cents to $73.35 a barrel.
“The Chinese data is slightly disappointing but the focus remains on a recovery in Western oil demand.
The US is the world's largest oil consumer and tomorrow's oil data will be pretty important,” said Toby Hassall, an analyst with CWA Global Markets in Australia.
A Reuters poll of analysts called a steep 1.5 million barrels drawdown in US gasoline stocks in the week ended August 7th, deeper than the previous week's 200,000 barrels fall.
But the poll also predicted a bearish 800,000-barrels rise in crude stocks on higher imports and lower refinery utilization.
The American Petroleum Institute will release a first set of data at 8.30pm, to be followed tomorrow by data from the Energy Information Administration (EIA).
Oil has more than doubled from this winter's low $30s but high inventories worldwide have kept prices in check as they suggest still weak demand.
But a slightly brighter economic outlook may prompt the EIA to again raise its world oil demand forecasts when it releases its August report at 5pm, adding to the past two monthly reports' higher forecasts.
Reuters