Oil calms after losses

Oil steadied as a lackluster recovery in China overshadowed bullish outlooks from the International Energy Agency and upbeat U.S. data. U.S. crude traded around $71 a barrel after closing down 0.4 percent on Tuesday. Some investment banks cut their forecasts for China’s economic growth this year after weak April data, but the IEA remains bullish on demand prospects in the Asian nation after COVID restrictions end. Crude has fallen about 12 percent this year as China’s slower-than-expected recovery, the Federal Reserve’s aggressive monetary tightening campaign and recent concerns about the U.S. debt ceiling weighed on the outlook. Still, U.S. retail sales rose in April, suggesting that consumer spending in the world’s largest economy is holding up in the face of economic headwinds. China’s weak manufacturing performance “could hamper, if not chronically impair, hopes of a return to pre-Covid strength,” said Vishnu Varathan, head of Asia economics and strategy at Mizuho Bank in Singapore. The industry-funded American Petroleum Institute reported that U.S. domestic crude inventories rose by 3.69 million barrels last week, according to people familiar with the figures. Gasoline supplies tightened as inventories at the oil storage hub in Cushing, Oklahoma, also rose.