Oil closes up nearly 1% amid China economic recovery markers

Oil drilling rigs

Oil prices closed higher today, June 7, as demand concerns persisted amid mixed macroeconomic data from China.

International benchmark Brent crude settled up 0.9% at $76.95 a barrel, while West Texas Intermediate (WTI) crude rose 1.1% to $72.53 a barrel.

China's imports of crude oil in May jumped by 17.4% on a monthly basis, with refineries returning from maintenance and building stocks, General Administration of Customs data showed.

The country’s crude oil imports averaged 12.11 million barrels per day (bpd) in May, up 12.2% year-on-year (YoY).

However, uncertainty remained over the extent of recovery in the world's second largest economy after COVID-19 measures were eased.

The country's total exports declined more than expected by 7.5% YoY. Domestic demand also remained weak, with total imports declining for the third month in a row, falling by 4.5% YoY.

China’s economy and oil demand will be an important driver of oil prices this year, even after OPEC+ decision on production cuts, Fatih Birol, Executive Director of International Energy Agency (IEA), told Bloomberg.

Meanwhile, the Organization for Economic Cooperation and Development said that the global economy is on the verge of a weak recovery from the shocks of COVID-19 and the Russian war in Ukraine. The group raised its forecast for global economic growth by 0.1% to 2.7% this year.

US inventories data showed that oil stocks declined by 500,000 barrels during the past week, against expectation of an 1.022 million barrels increase. Gasoline stocks increased by about 2.7 million barrels, and distillate stocks rose by 5.1 million barrels.