Indicating improved demand in the world’s second-largest oil-consuming country, oil prices increased on Tuesday as China released better-than-expected economic data.
International benchmark Brent crude traded at $85.17 per barrel at 10.01 a.m. local time (0701 GMT), a 0.48% increase from the closing price of $84.76 a barrel in the previous trading session.
Simultaneously, the American benchmark West Texas Intermediate (WTI) traded at $81.19 per barrel, up 0.44% from the previous session’s close of $80.83 per barrel.
China’s first-quarter GDP (gross domestic product) increased sharply compared to expectations, putting the country in the spotlight after it lifted its strict pandemic measures.
According to China’s National Bureau of Statistics on Tuesday, Chinese GDP grew by 4.5% in the first quarter, marking the highest growth since the first quarter last year, when it grew by 4.8%.
China’s positive data supported the upward price movement, while the market observes supply side developments after the OPEC+ decision to cut 1.6 million barrels per day (bpd) as of May, on top of its previous 2 million bpd reduction.
According to Daniel Hynes, a commodity strategist at Australia and New Zealand Banking Group, in an e-mailed note, OPEC’s decision will not take effect until next month.
“We expect the cuts will increase the market deficit to 2 million bpd in 2023,” he said.