Oil futures rebounded on Tuesday after a period of volatility and uncertainty.
The market has been under pressure for multiple weeks. However, changing conditions could help the market recover. Traders reacted to new monetary stimulus measures from China.
The latter could help drive economic growth and oil consumption, potentially alleviating current demand concerns. This comes on top of the stimulus the Federal Reserve’s rate cut and expected monetary policy softening could provide to oil demand in the US.
Markets have also reacted to the increasing tensions in the Middle East where risks of a larger conflict could potentially threaten oil supplies. As a result, continuing confrontations in the region could push the market to the upside. Traders also pay attention to the US Gulf Coast, where forecasts of an impending hurricane threaten oil production. As a result, oil companies are evacuating staff and suspending operations in anticipation of severe weather, further adding to the market’s tightening risks.
Traders could look forward to the release of the US crude oil inventory figures today and tomorrow to assess the health of the country’s oil demand. While the API figures are expected to show a drawdown, a surprise could fuel volatility on the market.
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