Home Business News Oil stands for further gains today, driven by China’s economic recovery in February

Oil stands for further gains today, driven by China’s economic recovery in February

18th Mar 24 10:19 am

Crude oil prices continue to advance at the beginning of the new week, led by Brent crude, which rose by 0.6% today and reached its highest level since the beginning of last November, exceeding the level of $85 per barrel.

West Texas Intermediate crude also rose by 0.1% after a negative opening and reaches the level of 81.04. At approximately 7:30 a.m. GMT.

The oil market received support from the Chinese economy at dawn today, with a faster-than-expected acceleration of industrial production in February, the highest in three years, in addition to signs of optimism about the future with greater than expected growth in fixed asset investments.

Industrial production is the heart of the Chinese economy and therefore contributes significantly to pushing oil prices higher if its growth accelerates to meet the demand of factories that are extremely hungry for fuel.

Industrial production recorded an unexpected growth of 7% compared to expectations for a slowdown from 6.8% to 5.3% last February on an annual basis, and today’s reading represents the fastest pace of growth since June of the year 2021. Since the beginning of the year, it industry output has grown by 7% on an annual basis as well.

Investments in fixed assets also recorded the fastest growth rate since May of last year at 4.2% on an annual basis, which was far from expectations of 3.2%, and this also represents the third consecutive month of accelerated growth.

This rapid growth in spending on fixed assets strengthens sentiment about the ability of the Chinese economy to restore growth, as this type of spending on expensive and durable equipment will not coincide with a negative vision about the future of growth.

In contrast to these positive data, retail sales growth slowed to 5.5% on an annual basis in February, which was worse than expected and represents the slowest pace of growth since last September.

Unemployment also rose again, unexpectedly, to 5.3% in February, the highest since July of last year.

Also, this week, the market are awaiting the US Federal Reserve’s decision on the interest rate, which is likely to come in favor of keeping current rates unchanged, but the focus will be on the speech following the meeting, especially when talking about the progress made in confronting inflation and future expectations for its path.

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