SINGAPORE: Oil prices rose on Wednesday, boosted by expectations of firm summer demand in the world’s two largest consumers, the US and China, though gains were capped by analysts’ caution about the wider economy.

Prices have seesawed in a tight range as signs of steady demand from an increase in travel during the Northern Hemisphere summer have competed with concerns that US tariffs on trading partners will slow economic growth and fuel consumption.

Brent crude futures rose 36 cents, or 0.5 percent, to $69.07 a barrel by 8:46 a.m. Saudi time. US West Texas Intermediate crude futures were up 47 cents, or 0.9 percent, to $66.99.

That reversed two days of declines as the market downplayed the potential for supply disruptions after US President Donald Trump threatened tariffs on purchases of Russian oil.

Major oil producers are pointing to signs of better economic growth in the second half of the year while data from China showed consistent growth.

“Strong seasonal demand is currently providing upward momentum to oil prices, as summer travel and industrial activity peak,” LSEG analysts said in a note.

“Increased gasoline consumption, especially in the US during the Fourth of July holiday period, has signalled robust fuel demand, helping offset bearish pressures from rising inventories and tariff concerns.”

China data showed growth slowed in the second quarter, but less than feared, in part because of frontloading to beat US tariffs. That eased some concerns about the economy of the world’s largest importer of crude.

The data also showed that China’s crude oil throughput in June jumped 8.5 percent from a year earlier, indicating stronger fuel demand.
However, some analysts saw the price rebound as temporary.

Much of the steadying of crude markets after two volatile sessions resulted from a mild technical correction rather than any significant shift in underlying fundamentals, said Phillip Nova’s senior market analyst Priyanka Sachdeva.

“Investors should monitor inflation and interest rate expectations in the United States as Trump’s continued push for broader tariffs could be inflationary and could dampen fuel demand in the medium term,” she said.

OPEC’s narrative remained more optimistic, Sachdeva said, pointing to the grouping’s monthly report on Tuesday that forecast that the global economy would do better in the year’s second half, boosting the oil demand outlook.

Brazil, China and India are exceeding expectations while the US and EU are recovering from last year, it added.

“The technicals may offer short-term relief, but fundamentally, the market lacks momentum,” Sachdeva said.

“Until clarity emerges on global growth, policy direction, and real demand recovery, especially from Asia, the crude complex looks set to drift sideways.” 

RIYADH: Saudi Arabia’s National Debt Management Center raised SR5.02 billion ($1.34 billion) through its riyal-denominated sukuk issuance for July, marking a sharp 113.6 percent increase compared to the previous month.

In June, the Kingdom issued sukuk worth SR2.35 billion, while May and April saw issuances of SR4.08 billion and SR3.71 billion, respectively.

Sukuk are Shariah-compliant financial instruments that offer investors partial ownership in an issuer’s underlying assets, making them a popular alternative to conventional bonds.

According to NDMC, the July issuance was divided into four tranches. The first tranche, valued at SR776 million, will mature in 2029. The second, worth SR1.34 billion, is set to mature in 2032, followed by a third tranche of SR823 million due in 2036. The largest tranche, totaling SR2.08 billion, will mature in 2039.

Saudi Arabia’s debt market has witnessed robust growth in recent years, attracting strong investor interest in fixed-income instruments amid a global environment of rising interest rates.

In April, Kuwait Financial Center, also known as Markaz, reported that Saudi Arabia led the Gulf Cooperation Council in primary debt issuances during the first quarter of the year. The Kingdom raised $31.01 billion from 41 offerings, accounting for over 60 percent of total issuances across the region.

Credit rating agency S&P Global noted in April that Saudi Arabia’s expanding non-oil sector and steady sukuk issuance volumes are likely to support the growth of the global Islamic finance industry.

The agency forecasts global sukuk issuance to reach between $190 billion and $200 billion in 2025, with foreign currency-denominated offerings contributing up to $80 billion, assuming market conditions remain stable.

Echoing that outlook, a report by Kamco Invest published in December said Saudi Arabia is expected to account for the largest share of bond maturities in the GCC between 2025 and 2029, with $168 billion set to mature during the period.

Earlier this month, S&P Global reiterated its positive view, stating that the global sukuk market is on track to maintain its momentum in 2025, with foreign currency-denominated issuances projected to reach between $70 billion and $80 billion.