Oil prices pare earlier gains as banks cut China growth forecasts

By Katya Golubkova

TOKYO (Reuters) – Global oil prices fell on Monday, reversing gains of last week as questions about China’s economy outweighed OPEC+ production cuts and the seventh consecutive decline in the number of oil and gas platforms operating in the United States.

Brent crude fell 68 cents to trade at $75.93 a barrel at 0042 GMT, while US West Texas Intermediate (WTI) crude fell 59 cents to $71.19.

Last week, Brent posted a gain of 2.4% and WTI of 2.3%.

A number of major banks have lowered their gross domestic product growth forecasts for China in 2023 after data from May last week showed the post-COVID recovery in the world’s second-largest economy was faltering. .

China will roll out more stimulus to its slowing economy this year, sources told Reuters, but worries about debt and capital flight will keep measures aimed at bolstering weak demand from the consumer and manufacturing sectors going. private sector.

Still, Chinese refinery throughput rose in May to its second-highest total on record, helping to boost last week’s gains, and U.S. energy companies reduced the number of oil and gas rigs in operation. for a seventh consecutive week for the first time since July 2020.

The oil and gas rig count, an early indicator of future production, fell 8 to 687 in the week to June 16, the lowest since April 2022.

Voluntary production cuts implemented in May by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, as well as a further cut by Saudi Arabia in July, are also supporting oil prices.

“There were also signals that the driving season in the United States would bring strong demand,” ANZ Research said in a note, noting that U.S. gasoline demand soared to 9.24 million barrels per day. last week, its highest level since December 2021.

(Reporting by Katya Golubkova; Editing by Tom Hogue)

Leave a Comment