Price of crude strongly holds its ground with positive GDP in China
In the last couple of month, there has been a strong bullish rally in the oil market despite the oversupply of oil in the global economy. Previously the price of oil sharply falling in the global economy and most of the investors were deeply worried due to the strong selling pressure in the oil market. However, the price of oil found some strong ground in the global market after OPEC decided to limit the production of oil to bring stability in the energy field. After such a drastic event by the OPEC member, the price of Brent and Crude strongly rallied and the oil investors made a decent profit out of it. However, despite the bullish sentiment in the oil market in the last couple of week, the leading investors are now overly cautious as the buying pressure has faded out to a great extent in the recent days as uncertainty increases. The price of oil is confined in box region in the global market and most of the professional investors are now waiting for the breakout of the oil price. If the market falls from this level then we will see a strong drop in the price of oil in near future.
China’s GDP giving a boost to crude: In the last Friday the price of crude gain a decent amount bullish pressure in the global market after the release of the positive GDP data from the Chinese government. On the other hand, the 45th U.S president Dolan trump stated that they are going to look at the current energy sectors crisis and most likely to cut their current production rate to bring stability in the price of oil in near future. The price of crude went up by 0.23% in the global economy and traded at $52.24 a barrel on the New York Mercantile Exchange. On the other hand, the price of Brent oil rise by 0.20% in the global economy and traded at $54.29 a barrel. In the last week data, the Chinese economy showed a significant progress in the global economy as the GDP grew by 6.8% in the global economy. The leading economist in the Chinese government was expecting 6.7% growth but the out beat data surprised the whole world and pushed the price of crude higher in the global market. Most of the leading investors are now thinking that the Chinese government will show more excellent performance in the field of economy in near future which is most likely to boost the energy sectors in the near future.
Growth in China’s GDP and its impact: There has been a decent rise in the China’s GDP for near about 1.7% in the global world and most of the investors are now thinking that the Chinese government is securing a stable position in the global economy. The industrial production of the Chinese also rose by 6.0% in the global world and this is significant improving in the financial sectors since its only 1 tick below the significant rise of 6.1 % in the global market. There has also been a significant improving in the retail sales section as the data shows 10.9% increment beating the expected data which was only 10.7%.These 0.02 gain in the global economy is overwhelming for the oil investors since the price of oil tends to rally higher with a positive economic performance from the Chinese government. On the other hand, the FED chairperson Janet Yellen has stated that the recent performance of the Chinese government might face some difficulties in the global world since a sharp rise in the economic performance of a country often creates an inflation problem. However, the Chinese government is well aware of this fact and they have taken proper initiative to restrict all the possible hazards to limit their inflation problem in near future.
The sentiment of the leading economic country: The oil investors are in fear since the number of active oil rigs in the U.S economy has dramatically increased to 551 in the last year and if all the rigs become active then the oversupply problem of oil will again bring the sellers back in action in the market. However, despite the fact, the West Texas Intermediate oil traded higher on the last Thursday even though the traders are well aware of the fact of unexpected oil inventory build. According to the U.S energy administration department, the crude oil inventories jumped by 2.347 million barrels by a contract of January 13.However, the leading market researchers are thinking that there will be a draw of 0.342 million barrels. On the other hand, the American Petroleum Institute has stated that there has been a major drop in the supply of crude for near about 5.04 million barrels and such an optimistic data gave the crude price a significant boost in the global economy. Despite this ongoing crisis, OPEC was expecting to limit the production rate to 1.8 million barrels per day to 32.5 million within the next six months but results are not as expected as it was supposed to be.
Summary: The price of crude traded higher in the global economy as the Chinese GDP increased by 6.7% in the global world. Most importantly the U.S government has also stated that they will try to limit to production oil to bring stability in the energy sectors. On the hand, OPEC leaders will try to implement more strict policy in the current production rate to mitigate the ongoing energy crisis. And if things go as a plan then we will see a strong rally in the price of oil near future.