- The oil price has soared nearby $75.00 amid hopes of a solid recovery in China.
- IEA’s Birol claimed half of the growth in global oil demand this year will come from China.
- Investors should brace for a hawkish interest rate guidance in Fed Powell’s speech.
West Texas Intermediate (WTI) is on the verge of capturing the critical resistance of $75.00 in the Asian session. The black gold recovered dramatically after dropping to near $72.60 amid growing hopes of an economic recovery in China after dismantling the pandemic controls.
The recovery move in the oil price was extremely firmer despite caution in the market mood. Meanwhile, the US Dollar Index (DXY) has corrected to near 103.17 after printing a fresh four-week high of 103.40. After a three-day strong winning spell, the USD Index is expected to display a sideways performance ahead of the speech from Federal Reserve (Fed) chair Jerome Powell, which is scheduled for Tuesday.
Rising fears of a recession in the United States have already dented oil demand for the past one year. And, a further decline in oil orders looks likely on expectations that the Fed will hike interest rates amid skyrocketing employment additions in the US labor market in January. A sheer increase in the US employment numbers despite slowdown in activities has made the battle against inflation uglier. Stronger-than-anticipated fresh additions of labor could propel a rebound in the declining trend of the US Consumer Price Index (CPI).
Meanwhile, commentary from International Energy Agency (IEA) Executive Director Fatih Birol on the sidelines of the India Energy Week conference on Sunday that “Oil producers may have to reconsider their output policies following a demand recovery in China, the world's second-largest oil consumer,” as reported by Reuters has infused an adrenaline rush into the oil bulls. He further claimed, “Half of the growth in global oil demand this year will come from China.”
For further guidance, investors will keep an eye on the oil stockpiles data by the US American Petroleum Institute (API) for the week ending February 03.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds gains near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.