Oil prices firmed yesterday after climbing about 3 per cent in the previous session as expectations that OPEC-led supply cuts would tighten markets despite signs of a global economic slowdown.
Brent crude oil hit 60.83 dollars per barrel, 19 cents, or 0.3 per cent above the last close.
West Texas Intermediate (WTI) crude was up 10 cents, or 0.2 per cent, at 52.21 dollars a barrel.
“It seems the oil market is looking at Saudi Arabia’s aggressive supply cuts and Chinese aggressive stimulus,” said Jonathan Barratt, chief investment officer at Probis Securities in Sydney.
China’s central bank yesterday made its biggest daily net cash injection via reverse repurchase agreement operations on record, more evidence that authorities are shifting to policy easing to counter a slowdown in Asia’s biggest economy.
Earlier this week, China reported poor December trade data, with both exports and imports contracting from a year earlier.
“Situation of a developing shortage might arise if the Sino-US trade war goes away, the Chinese economy kicks into gear, Brexit is solved and the United States make good threats on Iran,” Barratt said.
Oil prices yesterday, however, were prevented from rising further as signs of economic slowdown mounted elsewhere across the globe.
In Japan, core machinery orders slowed sharply in November in a sign corporate capital expenditure could lose momentum as the US-China trade war spills into the global economy.
Meanwhile, the US economy is taking a larger-than-expected hit from a partial government shutdown, White House estimates showed on Tuesday. (Reuters/NAN)
