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Crude oil prices edged higher Tuesday, rebounding after the previous session’s weakness ahead of the latest readings on U.S. crude supplies.

By 08:55 ET (12.55 GMT), the U.S. crude futures traded 0.2% higher at $74.23 a barrel, while the Brent contract climbed 0.1% to $78.59.

U.S. inventories in focus

The main focus Tuesday will be on the release of the weekly U.S. inventory data, from the industry body American Petroleum Institute later in the session and then the official numbers from the Energy Information Administration the following day.

These are expected to show U.S. crude oil stockpiles and product inventories fell last week, after a substantially bigger-than-expected build in the prior week which disappointed markets last week.

A key measure of U.S. fuel demand, this indicated that gasoline consumption dropped over the prior week, which was uncharacteristic of the demand-heavy summer season.

Traders will be looking to see the impact of extreme weather conditions on the demand for power, with a heatwave in Texas meaning homes and businesses kept air conditioners cranked up.

U.S. retail sales disappoint

That said, gains have been small after data released earlier Tuesday showed that U.S. retail sales rose only 0.2% on the month in June, below the 0.5% growth expected.

This suggested that consumers are feeling the heat of the Federal Reserve’s aggressive monetary tightening, and economic activity could be hit as the year progresses.

More Chinese stimulus coming?

The crude market recorded steep losses on Monday after data showed that economic growth in China, the world’s largest oil importer, slowed substantially in the second quarter.

However, the stuttering nature of the country’s economic recovery from its COVID hit means traders are expecting Beijing to increase stimulus to try and boost spending.

The “price action in oil following the release of weaker-than-expected Chinese GDP numbers demonstrated well that demand is still the key concern for the oil market. This is particularly the case when it comes to China, given it makes up the bulk of expected demand growth this year,” said analysts at ING, in a note.

Source: Investing.com