Most of the major oil markets closed higher last Sunday, thanks to higher crude prices, which reinforced optimistic economic growth expectations from China, which indicates an increase in demand for fuel in the second largest economy in the world, according to CNBC. In the report, which was translated by “Al-Youm” newspaper, the most prominent of its contents.
The site said that the rise in oil by about $1 a barrel led to weekly gains, for the second week in a row, largely driven by bright economic prospects for China and expectations resulting from boosting demand in the world’s second largest economy..
“Many traders believe that it is very likely that we will see an increase in demand from China as it continues to stop the Covid policies, which have led to the cessation of most industrial activities,” explained Naim Aslam, analyst at AvaTrade Brokerage.
Over the past week, the US index rose by more than 1%, and oil also received support, in light of expectations that the US Federal Reserve will adopt less interest increases than the trend that continued throughout 2022..
A Reuters poll predicted that the US Federal Reserve would end its tightening cycle with increases of 25 basis points in each of its next two meetings, after which it is likely to keep interest rates steady for at least the rest of the year..
“The chances of a soft landing for the US economy seem to be increasing. The Fed’s next rate-setting meeting will be held from January 31st to February 1st and we are optimistic,” said Fed Vice Chair Lyle Brainard.--
On the other hand, Edward Moya, chief market analyst at OANDA, said: “The two largest economies in the world need more crude oil, and this is a good sign for the markets.”-
Moya added, “The oil market has declined before due to fears of a global recession, but there are still signs of a return and an increase in prices in 2023.”
Jim Ritterbusch of the consulting firm, Ritterbusch & Associates, commented, saying: “Climbing the price of Russian oil, which is spreading in global markets, may help boost oil prices, due to Russia’s refusal to export at this price, which reduces supply.”
“Sanctions and price caps imposed on Russian crude gradually cause some impact on prices and will become a more bullish factor when the flow of Russian oil shipments is absorbed into the global market,” Ritterbusch continued.
In conclusion, CNBC pointed out that Russia maintained its position as the second largest oil supplier to China in 2022, while Saudi Arabia topped the list..