WTI Crude Oil Edges Higher After China Data Disappoints, Hopes for Stimulus Measures Support
WTI crude oil prices are edging higher early on Thursday, trying to recover losses from the previous trading session on the release of the EIA crude inventories report from the US. At the time of writing, WTI crude oil is trading at around $55.18 per barrel.
Wednesday’s EIA report revealed an unexpected build in US crude inventories by 5.7 million barrels during the previous week, as opposed to economists’ expectations for a build of only 494k barrels for this period. This caused crude oil to close the session 0.9% lower.
However, early in the Asian session, weak PMI data out of China has driven a surprising boost in crude oil prices over rising expectations for additional stimulus measures from the government which could support oil demand. China saw factory activity contract for the sixth consecutive month while the services sector activity slid to the lowest level seen since February 2016 in October.
Increased expectations for central banks to turn dovish and roll out supportive measures to boost economic growth have caused buyers to enter the picture in the hopes of revival in demand for crude oil. On Wednesday, the Fed announced a 0.25% rate cut, prompting markets to anticipate similar measures from other leading central banks as well.
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