The losses were stemmed by optimism over a healthier demand growth outlook from the Asian giant and the US.
China’s exports unexpectedly fell for the second straight month in March while import growth dropped sharply, intensifying concerns about weak manufacturing and slowing growth in the world’s second-largest economy.
But the country’s customs bureau sounded optimistic about the outlook, saying it saw a pickup in the second quarter due to an improving trade environment. The nation’s crude imports were little changed from a month earlier.
Brent crude fell $0.49 to $107.49 per barrel by Thursday morning, after gaining $2.16 over the past two days. US crude fell $0.38 to $103.22.
“We are seeing a further pull-back in oil because China’s trade numbers fell short of expectations,” OptionsXpress market analyst Ben Le Brun told Reuters. “Overall, crude import numbers seem healthy and it shows that oil demand is still there, but oil is just one side of the story.”`
There has been a run of weaker-than-expected data out of China this year that has raised fears the economy may be slowing more than had been previously expected.
“The market is reacting to the overall trade numbers and it looks like participants are trying to gauge if these weak overall numbers will make China announce some stimulus, more spending on infrastructure to boost growth,” Le Brun said.
Further losses were also stemmed after minutes of the latest US Federal Reserve’s policy meeting suggested the central bank may be more cautious towards raising interest rates, easing market concerns of a pullback in stimulus before the economy is ready.
“Oil prices look set to rise on the back of a continued soft monetary policy that will allow U.S. consumers to spend more,” Le Brun said.
A steep fall in gasoline stockpiles in the US also put a floor on oil prices, and helped overshadow a rise in overall crude stockpiles in the world’s top consumer.
Gasoline stocks fell by 5.2 million barrels to 210 million barrels in the week ending 4 April, Energy Information Administration data showed, more than the expected 729,000-barrel draw. Demand for gasoline was 4.4% higher than a year ago at 8.8 million barrels per day.
Crude inventories rose 4 million barrels to 384 million barrels, much more than the 1.3-million-barrel build expected by analysts polled by Reuters.
Oil also drew additional support from tensions in Ukraine and the Middle East.
Libya’s state-run Petroleum Facilities Guard (PFG) took full control of eastern-most Hariga oil port on Wednesday, but a handover by rebels to the PFG had yet to happen at the Zueitina port, a PFG spokesman said.