Oil Bounces Back Slightly Ahead of Economic Figures

By David Ho

Oil prices experienced an increase on Wednesday morning in Asia, with investors closely monitoring economic data from the US and China.

The price of crude oil rose by 1.38% to $103.87, while Brent crude climbed 1.27% to $101.03 as of 10:24 PM ET (2:24 AM GMT).

Market participants are particularly focused on China’s factory gate prices for April. Additionally, fluctuations in the strength of the dollar can significantly impact oil prices, as crude is typically denominated in the currency.

Recent geopolitical tensions stemming from Russia’s invasion of Ukraine, along with economic difficulties in China, have further influenced the oil market. The ongoing conflict has exacerbated inflation, contributing to higher costs for a range of goods, including food and fuel. In the US, retail gasoline prices have surged to record levels ahead of the summer driving season.

Despite a strong start to the year, oil prices have gained more than 30% in 2023, buoyed by economic recoveries from the pandemic. Officials in Saudi Arabia and the United Arab Emirates have expressed concerns about dwindling spare capacity across all energy sectors, as reduced investment by producers is pushing prices higher.

Additionally, the American Petroleum Institute indicated that US crude stockpiles increased by 1.62 million barrels in the previous week, according to sources familiar with the data. Fuel inventories have also seen an expansion.