Oil futures nudged lower Monday, with a round of weaker-than-expected economic data from China.
West Texas Intermediate crude for June delivery were down 29 cents, or 0.4%, at $65.09 a barrel on the New York Mercantile Exchange. July Brent crude the global benchmark, was off 33 cents, or 0.5%, at $68.39 a barrel on ICE Futures Europe.
China said retail sales in April were up 17.7% from the pandemic-suppressed level seen a year earlier, compared with a 34.2% rise in March, The Wall Street Journal reported. April industrial production rose 9.8% year over year in April, after a 14.1% rise in March, while fixed-asset investment decelerated to 19.9% in the January-April period versus 25.6% in the first quarter.
Still, analysts said oil appears to be underpinned by optimism over the demand outlook for the second half of the year, a view reinforced by monthly forecast updates from both the Organization of the Petroleum Exporting Countries, or OPEC, and the International Energy Agency.
“As we see it, the situation on the oil market is fairly stable at present, with robust demand offsetting the increased supply from OPEC+ and possibly also from Iran, which is presumably preparing itself just now for the U.S. sanctions to be eased or even lifted” as negotiations continue around the Iran nuclear agreement, said Eugen Weinberg, analyst at Commerzbank, in a note.
“In a joint assessment by the leading energy agencies, not even the ongoing problems in India, the world’s third-largest oil importer, will be able to derail the recovery of demand,” he wrote. “Given the large number of short-term factors, we expect the volatile sideways trend of the oil price to continue.”