Oil prices rally extended Tuesday’s gains into Wednesday. It is rising by 1% in early European trade. It is as market sentiment turned bullish on hopes that China’s reopening would boost demand growth. With that, major economies may avoid recessions.
The U.S. benchmark, WTI Crude, was trading up by 0.95% at $81.00 as of 9:05 CET. Brent Crude, the international benchmark, was rising by 0.76% at $86.60. This is a building on the gains from Tuesday. We saw the strongest settlement in Brent since early December.
Signs of cautious optimism about a recovery in economies and oil demand had started to emerge. This is what OPEC Secretary General Haitham Al-Ghais said on Tuesday. All thanks to the Chinese reopening. The most recent GDP data out of China, while pointing to the lowest economic growth since the 1970s, beat the consensus estimate.
“The good outweighs the bad with the outlook for China’s economic future. China’s latest swathe of economic data points provide significant optimism that their reopening momentum could impress throughout the year,” Ed Moya, Senior Market Analyst, The Americas, at OANDA, said on Tuesday.
Yet, Moya warned that “China reopening optimism induced oil rally might have a little more in it, but it should stall out soon. Energy traders are probably a couple of dollars away from massive technical resistance.”
Source: Oil Price
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