Oil edged higher on Wednesday as traders await the latest developments from the U.S. government’s debt ceiling discussions. In addition, investors continue to monitor demand coming out of China as well as U.S. stockpile levels.
West Texas Intermediate—the U.S. benchmark—erased earlier losses while rising above the previous session’s close. This comes after the International Energy Agency insisted on Tuesday that global demand would climb more strongly than was previously expected this year. This comes as China’s post-Covid economic rebound continues to exceed expectations.
Still, China’s recent economic growth has been sluggish, with crude declining by 11% this year. UBS Group AG has lowered its previously bullish oil forecast, now settling on a year-end Brent outlook below $100 per barrel.
“Concerns over the health of the global economy and oil demand prospects have been front and center of the oil markets of late,” Stephen Brennock, an analyst at PVM Oil Associates Ltd. observed. “We’ve long argued that the bearish price action is unjustified.”
