Oil Bulls Riding Fast Over China’s Accelerated Growth

At the time of drafting this report, Brent crude prices traded close to $70 a barrel while U.S. West Texas Intermediate crude prices traded slightly above $65.73 a barrel.

Recent data reveal Chinese industrial output growth surged in the first two months of the year beating market expectations.

In addition, the world’s biggest economy continues to show more signs of positivity, as the death toll on COVID-19 related cases plunged to record lows, thereby giving oil prices the boost to stay around its current resistance of $70 a barrel. However recent price actions suggest there are signs of consolidation after a supercharged rally.

Consequently, Oil bulls are roaring loud as other data from the United States indicated rig counts dropped, meaning the world’s largest oil producer is yet to optimize production amid soaring oil prices.

Oil traders buying activity intensified in the early hours of Monday as traders went for the dip ahead of the widely expected upgrade of the world’s biggest economic outlook at this Wednesday interest rate decision, thereby keeping both oil benchmarks above the $60 a barrel price levels.

It’s highly unlikely for crude oil prices to fall below the critical support level of $60 a barrel taking into consideration, major oil producers have proposed maintaining the status quo at least for next month, though some traders are already murmuring on OPEC+ compliance efforts in recent weeks.

That being said, market pundits will weigh between the ramp-up in Chinese imports for this month versus a pending inflowing of Iranian oil, meaning the outlook of oil in the mid-term looks unclear as market watchers anticipate a possible distortion of energy demand/supply rebalancing amid any upside relating to Iranian oil production.