Oil edges up on higher US economic growth outlook; China import slump weighs
By Stephanie Kelly
NEW YORK (Reuters) -Oil prices edged higher on Tuesday as a U.S. government agency projected a rosier outlook on the economy, but bearish data on China's crude imports and exports weighed.
Brent crude futures gained 83 cents to settle at $86.17 a barrel. U.S. West Texas Intermediate crude rose 98 cents to $82.92.
Both contracts had fallen by $2 earlier in the session, but prices reversed course after a monthly report from the U.S. Energy Information Administration projected gross domestic product growth to rise by 1.9% in 2023, up from 1.5% in a previous forecast. [EIA/M]
The EIA also expects Brent crude oil prices to average $86 in the second half of 2023, up about $7 from the previous forecast.
U.S. crude production is expected to rise by 850,000 barrels per day (bpd) to a record 12.76 million bpd in 2023, the report added, overtaking the last peak of 12.3 million bpd in 2019.
Crude prices have been rising since June, primarily because of extended voluntary cuts to Saudi Arabia's production as well as increasing global demand, the EIA said.
«We expect these factors will continue to reduce global oil inventories and put upward pressure on oil prices in the coming months,» the EIA added.
Weighing on prices on Tuesday, however, China's July oil imports were down 18.8% from the previous month to the lowest daily rate since January, but still up 17% from a year earlier.
Overall, China's imports contracted by 12.4% in July, far steeper than the expected 5% drop. Exports fell by 14.5%, compared with a fall of 12.5% tipped by economists.
Despite the gloomy data, some analysts were still positive on China's fuel demand outlook for August to early October.
The peak season for construction and manufacturing
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