Oil prices were stable on Thursday, following a plunge on Wednesday, as the market balanced a jump in refinery runs at the world’s top crude importer China with a weak economic backdrop.

Brent crude futures were up 3 cents, or 0.04%, to $73.23 a barrel at 0903 GMT. U.S. West Texas Intermediate (WTI) crude rose 1 cent, or 0.01%, to $68.28 a barrel.

Both benchmarks fell 1.5% on Wednesday.

The market saw some support after data on Thursday showed China’s oil refinery throughput in May rising 15.4% from a year earlier, hitting its second highest total on record.

But a weak economic outlook weighed, as China’s industrial output and retail sales growth in May missed forecasts.

Also capping price gains were fears that higher interest rates would slow economies in the U.S. and Europe, and lower oil demand.

The U.S. Federal Reserve left interest rates unchanged on Wednesday but signalled at least half of a percentage point increase to borrowing costs by the end of this year.

The European Central Bank is expected to increase the deposit rate by 25 basis points to 3.5% later in the day, the highest level in 22 years, and leave the door open to further hikes.

Meanwhile, the Bank of England is set to take a monetary policy decision on June 22, with UK interest rates expected to rise above those in the U.S. this year.

Analysts, however, expect oil prices to see support later in the year as voluntary cuts by OPEC+ countries implemented in May, and from Saudi Arabia in July, coincide with robust demand.

UBS expects a supply deficit of around 1.5 million barrels per day (bpd) in June and more than 2 mln bpd in July.

“Once these deficits become visible in on-land oil inventories, we expect oil prices to trend higher,” the bank said in a note on Thursday.
Source: Reuters