Oil steadied as traders assessed data that highlighted continued weakness in China’s economy, and a drawdown in US crude stockpiles. Brent (BZ=F) was little changed near $76 a barrel, after losing more than 1% on Wednesday even as oil inventories at the key Cushing, Oklahoma, hub hit the lowest since 2014. West Texas Intermediate (CL=F) was above $73.
China’s consumer inflation fell further toward zero, according to figures on Thursday, a setback for the government’s efforts to drive up demand by injecting stimulus. Factory deflation in the world’s largest crude importer extended into a 27th month.
Oil has had a strong start to 2025, despite widespread concerns that prices would struggle this year given expectations for a global glut. The advance — which saw Brent touch the highest level since mid-October on Wednesday — has been driven by falling US stockpiles, lower supplies from Russia, and concerns that President-elect Donald Trump may roil flows when he takes office.
“I expect this volatility to go on into the inauguration,” said Wayne Gordon, regional chief investment officer at UBS Group AG, referring to the Jan. 20 handover. “The only thing we do sort of know is that he is unpredictable.”
Trump’s trade and security agendas may impact the global oil market. He’s pledged to put tariffs on all Canadian imports, potentially including shipments of crude, while in the Middle East, his administration is also expected to tighten sanctions against Iranian flows.
In response, Canada’s Energy Minister Jonathan Wilkinson warned against an oil trade war, saying nothing was off the table when it came to retaliation. US Midwest refineries were set up for heavy crude, which Canada supplies, he noted.
