Meanwhile, the IEA raised global demand forecasts based on strong numbers: File Image/Pixabay
It was back to normal for crude trading on Tuesday, with investors resuming their bearish inclinations and causing the commodity to dip, albeit minimally, based on what was perceived to be weak economic news coming from China and the U.S.
Brent settled down 32 cents to $74.91 per barrel and West Texas Intermediate settled down 25 cents to $70.86 after it was learned that industrial output and retail sales growth in China failed to meet forecasts in April; also, retail sales in the U.S. in April were less than expected, a sign that consumers were responding to rising prices and interest rates.
But the reaction to the news frustrated experts like Phil Flynn, senior market analyst at Price Futures Group Inc: he said, "There has been a lot of concern about China's industrial numbers, but if you look at their actual demand numbers or refinery runs, they're knocking on the door of breaking records."
Phil Flynn, senior market analyst, Price Futures Group Inc
They're knocking on the door of breaking records
Flynn was referring to an 18.9 percent year-on-year rise in China's oil refinery throughput in April, which is the second-highest level on record.
Data from the National Bureau of Statistics showed total refinery throughput reaching 61.1 million tonnes, the equivalent to 14.87 million barrels per day (bpd).
NBS data also showed China's crude oil production in April was 17.3 million tonnes versus 17 million tonnes in 2022.
The International Energy Agency was similarly impressed with China's performance: it raised its forecast for global oil demand this year by 200,000 bpd to a record 102 million bpd and said
China's recovery had surpassed expectations, with demand reaching a record 16 million bpd in March.
The IEA stated, "Prices were pressured lower by muted industrial activity and higher interest rates, which, combined have led to recessionary scenarios gaining traction.
"The current market pessimism, however, stands in stark contrast to the tighter market balances we anticipate in the second half of the year, when demand is expected to eclipse supply by almost 2 million bpd."
As for disappointment in U.S. retail sales, that too was misleading considering it was accompanied by strong job growth in April, a surge in factory production, and households spending more at restaurants and bars – all of which was ignored by crude traders.
Meanwhile another bullish development relatively ignored on Tuesday was the US government soliciting bids for as much as 3 million barrels of sour crude for its Strategic Petroleum Reserve, with deliveries planned for August.