Oil prices rebounded in Asian trade on Tuesday, bolstered by stronger-than-expected Chinese GDP data, which boosted optimism about a demand recovery in the country. However, concerns of rising U.S. interest rates and a stronger dollar limited gains.
By 10:30 a.m. Bangkok time, Brent oil prices rose 0.48% to $85.17 per barrel, while West Texas Intermediate crude futures climbed 0.45% to $81.19. On Monday, both contracts plunged by about 2%, their largest one-day drop in a month.
China’s gross domestic product (GDP) climbed 4.5% in the first quarter of 2023, according to the National Bureau of Statistics.
That was the fastest expansion since the first quarter of last year and was greater than the 4% predicted by a Reuters poll, suggesting that the economy was on the upswing after the end of COVID curbs. The data also backed predictions that a Chinese economic revival would push oil demand to record highs this year.
However, the degree to which the Federal Reserve would raise interest rates has put oil market mood on a short leash. Markets rethought their anticipation of an imminent slowdown in the Fed’s rate hike cycle in response to hawkish statements from Fed members and some signs of resilience in the U.S. economy.
