Oil prices rose on Wednesday as China’s factory output and retail sales beat expectations, a day after the International Energy Agency (IEA) raised its oil demand growth forecast for this year.
Brent futures rose 18 cents, or 0.2%, to $82.65 a barrel by 0647 GMT, while US West Texas Intermediate (WTI) crude advanced 15 cents, also 0.2%, to $78.41, Reuters reported.
China’s October economic activity perked up as industrial output grew at a faster pace and retail sales growth beat expectations, an encouraging sign for the world’s second-largest economy.
The IEA joined the Organization of the Petroleum Exporting Countries and its allies (OPEC+) in raising oil demand growth forecast for this year, despite projections of slower economic growth in many major countries.
“It (IEA) sees oil demand remaining healthy. It raised its forecast due to better-than-expected consumption in China,” ANZ Research said in a note on Wednesday.
A softer US inflation reading that bolstered expectations for an interest rate cut by the Federal Reserve next spring sent the US dollar down to a two-and-a-half-month low against a basket of other currencies. A weaker dollar can boost oil demand by making crude cheaper for buyers using other currencies.
The US Energy Information Administration (EIA) will release its first oil inventory report in two weeks on Wednesday. EIA did not release a storage report last week due to a systems upgrade.
For the week ended Nov. 10, analysts forecast energy firms added about 1.8 million barrels of crude into US stockpiles, according to a Reuters poll, in line with from the American Petroleum Institute out Tuesday.