Oil prices steady as markets weigh supply tensions and China’s economic recovery

(Reuters) – Oil prices were little changed on Tuesday as concerns about China’s economic recovery prospects offset supply worries arising from tensions in the Middle East and Ukrainian attacks on Russian refineries.

Brent futures for August delivery rose 7 cents, or 0.08%, to $86.06 a barrel by 00:15 GMT, ahead of the contract’s expiration later this week. The more actively traded September contract rose 8 cents, or 0.09%, to $85.23.

U.S. crude oil futures rose 11 cents, or 0.13%, to $81.74 a barrel.

Both benchmarks rose about 3% last week, marking two consecutive weeks of gains.

But since then there have been growing concerns about the prospects for recovery in the world’s second-largest economy.

Retailers in China face a daunting near-term future following a disappointing mid-year online shopping festival.

Consumers in China, the world’s biggest oil importer, have been reluctant to spend due to concerns about their personal wealth, fueled by the housing crisis, stunted wage growth and high youth unemployment, putting China at risk of achieve its stated economic growth objective of “around 5 years”. %” this year.

Meanwhile, two Israeli airstrikes targeting aid supplies killed at least 11 Palestinians in Gaza on Monday, medics said, as Israeli tanks advanced deeper into Rafah in the south and fought their way back into areas in the north that had already been destroyed. had subdued months ago.

After more than eight months of fighting, international mediation supported by the United States has so far failed to reach a ceasefire agreement. Hamas says any deal must end the war, while Israel says it will agree only to temporary pauses in fighting until Hamas is eradicated.

In another major clash, Ukraine’s President Volodymyr Zelenskiy said on Monday that his country had struck more than 30 Russian oil processing and storage facilities, although he did not provide a time frame.

In the most recent attack, on June 21, Ukrainian drones targeted four refineries, including the Ilsky refinery, a major fuel producer in southern Russia.

EU countries agreed on Monday on a new package of sanctions against Russia over its war in Ukraine, including a ban on reloading Russian liquefied natural gas (LNG) in the EU for later shipment to third countries.

In the US, Federal Reserve Bank of San Francisco President Mary Daly said on Monday she does not believe the US central bank should cut rates before policymakers are confident inflation is heading towards 2%.

Delays in lowering interest rates would keep the cost of borrowing higher for longer, which could reduce economic activity and harm oil demand.

The story continues

U.S. crude oil inventories are expected to have fallen by 3 million barrels in the week to June 21, a preliminary Reuters poll showed on Monday. Gasoline inventories should also have declined, while distillate inventories likely increased last week.

(Reporting by Arathy Somasekhar in Houston; Editing by Jamie Freed)