WTI Crude edges up as investors weigh China economy woes vs. US inventory draw

Futures on US West Texas Intermediate Crude Oil were registering small gains on Wednesday, as concerns over China’s sluggish economy were weighed against potential tighter supply in the US.

Chinese retail sales, investment figures and industrial production fell short of market expectations, adding to concerns that sluggish recovery could last longer than anticipated.

China’s central bank surprisingly cut key policy rates for the second time in the past three months yesterday to prop up recovery, but some analysts believe the cut is not sufficient to affect economy in a meaningful manner.

Meanwhile, the latest data by the American Petroleum Institute showed crude oil inventories had decreased by 6.195 million barrels in the week ending August 11th, following a 4.067 million barrel build in the prior week. Analysts on average had expected a much smaller decrease – by 2.050 million barrels.

The official government inventory data will be released later today.

The fourth-quarter oil market outlook will “depend on the macroeconomic situation in China primarily, albeit it looks like Saudi will continue to address that via their cuts, if needed,” Rystad Energy’s research director Claudio Galimberti was quoted as saying by Reuters.

As of 12:32 GMT on Wednesday WTI Crude Oil Futures for September delivery were gaining 0.46% to trade at $81.36 per barrel.

At the same time, Brent Oil Futures for October delivery were gaining 0.39% on the day to trade at $85.22 per barrel.