Oil prices steadied Wednesday after an upbeat report from the IEA balanced the bearish impact of a further weakening of China`s yuan currency and disappointing Chinese industrial output data.
The yuan hit a four-year low on Wednesday after China allowed it to weaken further after a mini-devaluation on Tuesday to support the slowing Chinese economy, where industrial output grew less than expected in July.
China is the world`s biggest oil consumer after the United States and a weaker yuan erodes Chinese purchasing power for dollar-denominated imports like oil, potentially hitting fuel demand.
However, while slowing demand from China has helped bring down oil prices at a time of oversupply by big producers in the Middle East, oil demand elsewhere is accelerating, the International Energy Agency (IEA) said on Wednesday.
The world oil market had begun to rebalance as low fuel prices stimulated extra consumption, it said.
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