WTI Price Analysis: WTI jumps to multi-month amid tighter global supply and Chinese stimulus hopes Oil WTI Energy Commodities
Tighter global supply and Chinese inflation data are fuelling Oil prices.Intermediate rose to a high of $84.15, it highest level since mid-November 2022 and then settled around $83.00. Tighter global supplies on the prospects of further Saudi production cuts and deflation evidence in China, which sparked expectations of more aggressive Chinese fiscal policies, explain those upwards movements.
China reported that the Consumer Price Index from July came in at -0.3% YoY vs -0.4% expected, while the set a 4.4% yearly decrease in the same month, higher than the 4.1% expected. According to TD Securities analysts, evidence of deflation in the Asian gigant fueled hopes of “bazooka-like” fiscal stimulus packages to bolster the local economy. In that sense, further stimulus would raise Oil demand, and as China is the largest importer in the world, the prices rise.
In addition, Saudi’s voluntary production cuts and Russia's export curtailment contribute to a tighter global supply, favouring black gold’s price. On the data front, the EIA Crude Oil stockpiles report, which gives a weekly measure of the change in the number of barrels in stock of crude Oil and its derivates, came in at 5.85M in the first week of August, higher than the 0.567M expected.The technical outlook for the WTI is bullish for the short term, but indicators flash overbought conditions, suggesting that a technical correction may be on the horizon.
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