Oil prices inch higher with more US, Chinese economic cues on tap

Investing.com– Oil prices rose slightly in Asian trade on Thursday as the prospect of tighter supplies helped traders look past concerns over rising U.S. inflation, while focus remained on more upcoming economic data from the U.S. and China. 

Crude prices saw some consolidation in the prior session, as data showed that U.S. grew slightly more than expected in August. But analysts said the reading was not strong enough to elicit another interest rate hike by the Federal Reserve next week.

But in addition to the inflation reading, data also showed that U.S. unexpectedly grew in the week to September 8, with a rise in gasoline and distillate inventories suggesting that fuel demand was beginning to wind down with the end of the summer season.

was also seen coming within spitting distance of a 2020 record high. But the reading was insufficient in dispelling bets on a tighter market, following bigger-than-expected supply cuts from Saudi Arabia and Russia.

The supply cuts were the biggest boost to oil prices over the past two weeks, pushing them to 10-month highs. The prospect of tighter markets is also expected to underpin prices in the coming months, both the Organization of Petroleum Exporting Countries and the International Energy Agency said in their monthly reports this week. 

rose 0.3% to $92.20 a barrel, while rose 0.4% to $88.85 a barrel by 20:32 ET (00:32 GMT). Both contracts traded just below their highest levels for the year.

U.S. retail sales, Chinese industrial production awaited 

But gains in oil prices were limited, with more economic cues from the world’s largest oil consumers on tap this week.

U.S. and readings are due later on Thursday, offering up more cues on price pressures in the country after data released on Wednesday showed consumer inflation grew more than expected in August.

While the reading is unlikely to invite an immediate rate hike from the Federal Reserve, it is also expected to see the bank maintain its hawkish rhetoric .

Recent strength in the , in anticipation of the Fed meeting, has somewhat limited crude’s advance. The greenback hovered below a six-month peak on Thursday.

In China, and readings are due on Friday, and are expected to offer more insight into the world’s biggest oil importer.

While some economic readings- particularly trade and inflation- showed marginal improvements in the Chinese economy through August, overall sentiment towards the country remained largely negative, as it struggles with a slowing economic recovery.

This has also kept markets doubtful of whether China will drive global crude demand to record highs this year, as predicted by the OPEC.