(New York) Crude prices rose slightly on Tuesday after initially losing ground, weighed down by concerns over Chinese demand following the release of disappointing trade data in the country.
A barrel of Brent North Sea oil, for October delivery, gained 0.97% to $86.17 after dropping more than 1% in the session.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for September delivery, rose 1.19% to 82.92 dollars while it lost as much earlier in the day.
Oil prices had faltered “due to weak Chinese trade data,” commented DNB analysts.
China’s exports slumped in July to experience their steepest decline in more than three years, penalized by sluggish demand abroad and the economic slowdown in the country, which are weakening thousands of companies.
“With the slowing Chinese economy, traders have lowered their forecasts for global oil demand, which is translating into lower prices,” says Ricardo Evangelista, analyst at ActivTrades.
The Chinese trade data also triggered renewed concerns about the health of the global economy and thus risk aversion among investors, who are moving away from more volatile assets like oil and into safe havens. like the dollar.
However, this lack of appetite for risk changed at the end of the session in the wake of stock market indices which regained much of the ground they had lost in the wake of poor Chinese trade figures.
“Crude prices have changed direction rather sharply,” Bart Melek of TD Securities told AFP. “Oil has followed the change in risk appetite in equities,” he said. “It looks like the market continues to conclude that the (black gold) supply remains tight,” the analyst added.
Last week, Saudi Arabia announced the extension of its voluntary production cuts of one million barrels per day for another month. Russia followed suit, announcing a cut in oil exports of 300,000 barrels a day for September.
The dollar which had risen sharply during the day (up to 0.58%) also gave ground and was only advancing by 0.38% at the time of the close of crude prices.
This slight weakening also helped the course change direction. An appreciation of the US currency discourages oil purchases, while a weaker dollar strengthens demand.
