Oil prices rise amid mixed China cues, Israel-Hamas ceasefire in focus

Investing.com-- Oil prices rose in Asian trade on Thursday following somewhat mixed trade data from China, while markets continued to watch for any potential signs of de-escalation in the Middle East.

A potential ceasefire between Israel and Hamas remained in focus, especially as the U.S. picked up its efforts to broker an agreement. The Biden Administration paused weapon shipments to Israel over its invasion of Rafah. 

Brent oil futures expiring in July rose 0.4% to $83.93 a barrel, while West Texas Intermediate crude futures rose 0.5% to $78.96 a barrel by 23:39 ET (03:39 GMT). 

Prices had risen slightly on Wednesday after data showed a draw in overall crude inventories. But a build in gasoline and distillate inventories offset the overall draw.

Strength in the dollar also kept any major gains in crude limited, as a string of Federal Reserve officials warned that interest rates will remain high for longer.

China trade data positive, but crude imports dip

Government data showed on Thursday that China's trade balance grew less than expected in April, especially as imports blew past expectations.

But while the stronger imports signaled improving domestic demand and Chinese economic resilience, the reading showed that China's oil imports fell to 44.7 million tons in April from 49.1 million tons in March.

The import figure was also largely flat from April 2023.

The data indicated that demand in the world's largest crude importer may be cooling despite a pick-up in the overall economy, especially as the government pushed for more electric vehicle adoption, and demand for travel also remains limited.

Still, travel is expected to have picked up in May with the labor day holiday. Chinese refiners are also expected to increase output in the coming summer months.

Oil prices more likely to dip below $80 than rise above $90- Macquarie 

Analysts at Macquarie said they expected Brent to break below $80 in the coming months, citing “bearish fundamentals” and increasing expectations of an Israel-Hamas ceasefire. 

Increased production outside the Organization of Petroleum Exporting Countries and allies (OPEC+) is also expected to factor into less tighter supplies, while sticky inflation and high for longer interest rates are likely to weigh on demand. 

Still, any potential interest rate cuts could help buoy demand later this year. Macquarie analysts also said that any extension of ongoing production cuts by the OPEC+ will offer relief to oil prices.