Oil steady as sluggish China growth offsets trade deal optimism

Oil prices were steady on Friday as reports of sluggish economic growth in China, the world’s biggest crude importer, raised concerns about future fuel demand and countered optimism from the signing of the Sino-U.S. trade deal earlier in the week.

In the fourth quarter of 2019, the world’s second-largest economy increased by an expected 6% from a year earlier, while the full-year expansion was 6.1%, the slowest in 29 years, government data showed on Friday.

“A well-expected fourth-quarter China GDP rate provided little clue for oil price trading on Friday morning, and mounting downward economic pressure will perhaps limit oil’s upside in the mid- to long-term,” Margaret Yang, market analyst at CMC Markets.

Brent crude futures were 1 cent higher at $64.63 by 0427 GMT, after gaining nearly 1% on Thursday. The contract is down for a second week after slipping 0.5% from the prior week.

U.S. West Texas Intermediate futures rose 2 cents at $58.54 a barrel, having risen more than 1% the previous session. The contract dropped by 0.8% for the week, also the down for a second week.

Oil rose on Thursday after China and the United States signed their Phase 1 trade accord. The mood was further boosted after the U.S. Senate approved changes to the U.S.-Mexico-Canada Free Trade Agreement.

Surging Chinese demand in the form of refinery throughput figures offset the less positive economic growth data.

For 2019, Chinese refineries processed 651.98 million tonnes of crude oil, equal to a record 13.04 million barrels per day, and up 7.6% from 2018, government data showed. Throughput also set a monthly record for December.

The International Energy Agency offered a dim view of the oil market outlook for 2020 on Thursday. The agency forecast that oil supply would exceed demand for crude from the Organization of the Petroleum Exporting Countries, even if members are fully compliant in their agreement with Russia and other producers to curb output.