Brent crude oil prices rose by a dollar on Wednesday after signs of a dip in U.S. production, but gains were capped by Chinese quarterly growth slowing to a six-year low and by ebbing investor interest in commodities.
Front-month Brent crude futures LCOc1 were up a dollar at US$59.43 a barrel by 0705 GMT, while U.S. crude CLc1 climbed 65 cents to US$53.69.
In the United States, North Dakota’s February oil production fell 15,000 barrels per day (bpd) versus January, although the number of producing wells hit a record high.
That followed an Energy Information Administration report forecasting U.S. shale production would fall by 45,000 bpd to 4.98 million bpd in May, which would be the first monthly decline in four years.
But analysts said that investors were losing interest in commodities.
“Investor interest in commodities has deteriorated sharply in the past few weeks following the strongest start to a year since 2012,” Barclays said on Wednesday.
High supplies and slowing demand due to lower economic growth meant that oil prices were unlikely to rise sharply, eroding investor interest, it said.
“Given the poor return performance of commodities so far this year, it looks likely that the first two months of the year are likely to prove a peak in inflows for the year,” the bank said, adding that it expected net outflows to resume soon, especially in the oil sector.
Meanwhile, China saw its economic growth slow to 1.3 percent between January and March on a quarterly basis after seasonal adjustments, compared with growth of 1.5 percent in the previous three months.
March factory output rose 5.6 percent from a year earlier, below the 6.9 percent seen in a Reuters poll and its lowest level since the global financial crisis in 2008.
Despite its slowing growth, China’s implied oil demand in March is estimated to have grown by 7.6 percent from a year earlier to 10.53 million barrels per day (bpd).