China’s Energy Data Bailout Oil BullsCrude oil prices rebounded from some of its losses it recorded on Monday. At London trading session, oil traders are riding on the macro coming from the world’s second biggest economy, China, showing it consumed more oil than earlier anticipated last month
However the gains were capped as concerns about supply resumption in the Northern sea region, Libya, Gulf of Mexico weighed heavily on the bulls.
Both major oil benchmarks, which include Brent crude and West Texas Intermediate gained over 0.2% and were notable above their key support levels.
China, the world’s largest importer for fuel, brought in 11.8 million barrels per day of crude oil last month, showing an upside of 5.5% from 11.18 million barrels per day recorded in the month of August and 17.5% gain from 10.04 million barrels per day in September 2019.
The bulls seem to be rallying up on high hope that the U.S stimulus deal, will scale through, as the present administration, will not want to damage its dwindling chances of being reelected.
Also the International Energy Agency (IEA) in its recently released annual World Energy Outlook disclosed the introduction of a readily approved COVID-19 vaccine would help the fragile global economy reboot momentarily in 2021 thereby enhancing energy demand recovery optimally in 2023.
Although, as rising COVID-19 caseloads continue to make headlines, oil traders seem not to be so fussed about the global recovery hitting the brick wall on the basis that a complete lockdown mode as seen in Q2 are not an option for now while broader bias showing COVID-19 vaccines progress increasing rapidly, as helped soothe some traders nerves.
However in the near term, recent price action show, crude oil prices remain under pressure, as crude oil production restarts in major energy hubs, the bias is traders would be wary of taking excessive long bets, on the sentiments that the global economy hasn’t fired up yet, coupled with the fact that emerged nations are heading towards winter, known for having lower consumption for energy.