By Stephanie Kelly and Andrew Hayley
(Reuters) – Oil prices inched upwards in Asian trade on Tuesday as investors eyed a possible tightening of supplies, after sinking in the previous session on weaker-than-expected Chinese economic growth.
was up 26 cents at $78.67 a barrel by 0450 GMT, while U.S. West Texas Intermediate crude rose 29 cents to $74.44 a barrel.
Both contracts fell more than 1.5% on Monday.
Market participants were awaiting industry data later on Tuesday that is expected to show U.S. crude oil stockpiles and product inventories fell last week. [EIA/S]
Four analysts polled by Reuters estimated on average that U.S. crude inventories fell by about 2.3 million barrels in the week to July 14.
Lacklustre gross domestic product (GDP) data from China released on Monday “kept a cautious lid on prices with some reservations in its demand recovery,” said Jun Rong Yeap, a market strategist at IG in Singapore.
China’s GDP grew 6.3% year-on-year in the second quarter, compared with analyst forecasts of 7.3%, as its post-pandemic recovery lost momentum.
“Nevertheless, some traction from buyers has emerged lately, with prices breaking above its near-term consolidation pattern last week which may suggest some exhaustion in selling pressure, following the downbeat sentiments over the past one year,” Yeap added.
Meanwhile, U.S. shale oil production is projected to fall to nearly 9.40 million barrels per day in August, which would be the first monthly decline since December 2022, data from the Energy Information Administration showed on Monday.
Still, global supplies could see a boost from the resumption of output at two of three Libyan fields that were shut last week. Output had been halted by a protest against the abduction of a former finance minister.
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