Investing.com — Oil prices were little moved in Asian trading on Wednesday following strong gains in the previous session, as traders awaited more signals on stimulus spending from major importer China, while official data on US inventories was also expected later in the day.
Crude oil prices rose sharply on Tuesday after Chinese officials said the government will soon roll out more policies to support local consumption as data this week showed the country is in the second quarter.
Local media reports also suggested that the world’s largest oil importer will cut interest rates and reserve requirements further in the third quarter to support an economic recovery. But the People’s Bank of China is widely expected to remain stable on Thursday.
Increased government spending in China could boost fish demand after COVID-era lows. According to the Organization of Petroleum Exporting Countries, China is still expected to drive global oil demand to record highs this year.
futures fell slightly to $79.64 a barrel, while futures fell to $75.59 a barrel at 20:46 ET (00:46 GMT). Both contracts rose nearly 2% each on Tuesday.
Prices also received support as Russian ministers reiterated their plans to further cut oil exports.
US stocks in focus after last week’s bumper build
Markets now awaited data on US crude oil inventories for the week ending July 14. Data on those inventories shrank by 0.8 million barrels, following a significantly larger-than-expected increase in the previous week.
US government data is expected to show inventories have shrunk by 0.9 million barrels.
Lectures on fuel demand in the US will also be in the spotlight, after data from last week showed demand slowed despite the start of the travel-heavy summer season. A slew of adverse weather conditions across the country has caused fuel consumption to drop in recent weeks.
Declining inflation and Fed concerns keep oil markets upbeat
Softer-than-expected data from the US increased bets that inflation in the country was easing, which in turn is expected to provoke a less aggressive Federal Reserve in the coming months.
The reading, coupled with weaker than expected for June, led to bets that the Fed will announce a pause in its cycle of rate hikes after a final rate hike in July.
This idea weighed heavily on the , which fell to 15-month lows, benefiting commodities priced in the dollar.
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