Oil rises on hopes for China,
Oil prices rose on Friday, lifted by a rebound in Chinese stock prices and hopes that the Greek debt crisis could be resolved, but worries about oversupply and slowing demand limited gains.
Brent crude oil was up 31 cents at $58.92 a barrel by 0839 GMT. So far this month, the international benchmark has lost more than 7 percent.
The day’s gains lagged those seen in stock markets, as worries about global demand growth kept oil prices in check.
The International Energy Agency (IEA) said on Friday that oil prices are set to come under further pressure from easing global demand and an expanding glut of crude, while a rebalancing of the oil markets may last well into next year.
The IEA, the West’s energy watchdog, said it expected global demand growth to slow next year to 1.2 million barrels per day from 1.4 million this year – far less than needed to balance stubbornly growing non-OPEC and OPEC supply.
Front-month U.S. crude futures were trading around 33 cents higher at $53.11 per barrel.
Greece has put a cash-for-reforms proposal in front of creditors, raising hopes that a deal could be reached this weekend.
In China, the CSI300 <.CSI300> stock index closed more than 5 percent higher, extending gains from the previous session after a barrage of government support measures aimed at halting a 30 percent fall in share prices since June.
The plunge in Chinese shares, along with concerns about Greece, contributed in large part to a fall in Brent to as low as $55.10 this week.
“The selloff was about China, and the stock market there has started to stabilise so we have started to recover from oversold levels,” said Amrita Sen, chief oil analyst at Energy Aspects.
Traders said China’s slowing economy and car sales were preventing bigger price rises.
Chinese data as well as the IEA figures tempered gains. Auto sales there dipped for the third straight month, falling 2.3 percent in June from a year earlier, prompting a halving of its annual sales growth forecast to 3 percent.
Traders were waiting to hear whether a compromise would be reached between world powers and Iran that could lead to increased oil flows if nuclear-related sanctions are lifted, although Washington said it was in no rush to reach a deal.
Top oil exporter Saudi Arabia continues to keep output and export supply high, maintaining fully contracted volumes to Asia in August.