Oil Weekly: Futures Steady on Mixed China Macros, Refining Slump

VIENNA (DTN) -- Oil futures closest to expiration on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange steadied Monday morning, after official Chinese data released overnight revealed mixed economic performance in one of the key locomotives of global oil demand growth.

Data from the National Bureau of Statistics of China revealed slowing industrial growth in May, with both industrial production and fixed asset investments disappointing to the downside. While retail sales in May grew more than expected, up 3.7% year-on-year, they were overshadowed by a slowdown in refiner activity. NBS data revealed the second consecutive year-on-year decline in crude oil processing, down 3.3% year-on-year, tempering oil demand growth expectations.

In the U.S., gasoline and diesel inventories continued to expand alongside crude oil stockpiles among emerging signs of a slower-than-expected summer driving season. According to Energy Information Administration data, gasoline demand trailed year-ago levels by 1.3% in the four weeks leading up to June 7, and distillate fuel oil supplied to domestic markets was down 3.5% year-on-year. A potential turn-around is not likely to come any time soon: the University of Michigan's preliminary consumer confidence index for June fell to a seven-month low 65.6. Consumer's expectations have been falling since the beginning of the year, and their assessment of current conditions hasn't been this low since December 2022.

Macroeconomic data releases are set to provide more clarity this week, with U.S. industrial production and retail sales data out Tuesday and the EIA's weekly inventory report scheduled for Thursday release, sandwiched between week two regional Federal Reserve manufacturing indices.

Near 7:45 a.m. EDT Monday, WTI futures for July delivery were trading near $78.73 barrel (bbl), up $0.28, and Brent for August delivery hovered around $82.91 bbl, up $0.29. RBOB for July was up $0.0164 gal to $2.4160, and ULSD for July delivery gained $0.0100 gal to $2.4806.

Karim Bastati can be reached at karim.bastati@dtn.com