Oil prices dipped and base metals eased as commodity markets consolidated on Thursday after strong gains earlier this week but evidence of activity strengthening in the Chinese economy provided a boost to sentiment.
In energy markets, Nymex August West Texas Intermediate slipped 44 cents to $61.10 a barrel after rising by just over $2 a barrel on Wednesday.
ICE August Brent lost 77 cents at $62.32 a barrel. The August Brent contract was due to expire at the end of trading today and September Brent fell 52 cents to $63.00.
Tom Pawlicki of MF Global said the oil market was gaining support from an improvement in risk appetite but it was uncertain how much longer that would last. Mr Pawlicki said that although weakness in the dollar was also providing support for oil prices, the market faced headwinds from poor supply and demand fundamentals, slow economic growth, and the threat of increased regulation.
US weekly inventories data released on Wednesday painted a mixed picture. Crude stocks fell 2.8m barrels last week, more than the consensus forecast for a decline of 1.6m barrels.
US refinery utilisation rose 1.1 percentage points to 87.9 per cent, but refineries’ demand for crude remains soft, due to poor profit margins and weak demand from end users.
Petrol stocks rose 1.5m barrels, above the consensus forecast for an increase of 1m barrels.
Petrol demand remained weak, averaging 9.14m b/d over the past four weeks, up 0.6 per cent compared with the same period a year ago.
Nymex August RBOB unleaded gasoline traded 1.5 cents lower at $1.69.28 a gallon.
Distillate stocks, which already stood at their highest levels in almost 25 years, rose 600,000 barrels, below the consensus forecast for an increase of 1.9m barrels.
Demand remained weak, averaging 3.28m b/d over the past four weeks, down 11.7 per cent compared with the same period a year ago.
Nymex August heating oil lost 1.1 cents at $1.5708 a gallon.
Base metals were bolstered by evidence of improvement in the Chinese economy GDP growth rising to 7.9 per cent year-on-year in the second quarter from 6.1 per cent in the first quarter.
