(LONDON) Oil rebounded sharply on Thursday after three sessions of declines, as the resilience of the US economy and demand, and market tensions offset concerns about China’s economic health.
Around 10:30 a.m. EST (4:30 p.m. Paris), a barrel of Brent North Sea oil, for delivery in October, was up 1.44% at $84.65.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in September, gained 1.79% to 80.81 dollars.
Data released Wednesday by the U.S. Energy Information Agency (EIA) on the state of commercial oil reserves in the U.S. last week “show overall declines,” says PVM analyst John Evans. Energy.
The EIA also “reported weekly U.S. oil demand was at its year-to-date high,” DNB analysts point out.
Davide Petrella, an analyst at Moneyfarm, also recalls that the Organization of the Petroleum Exporting Countries and their allies (OPEC) “which accounts for around 40% of global oil production, has implemented production cuts since November 2022 to support the upward trend in prices in anticipation of the expected drop in demand”.
The market therefore remains tight, and “given OPEC’s persistence in cutting production, global supply could see a significant drop in the coming months,” he continued.
The “United States has been forced to tap into its strategic oil reserves, which have been steadily shrinking since the end of 2020,” Petrella adds.
Earlier this week, investors were indeed worried about Chinese demand after the publication of a series of disappointing economic indicators.
As China is the world’s largest importer of crude oil, the health of its economy is indeed a major element for oil demand.
However, for Edward Moya, analyst at Oanda, the current rebound in crude is also explained by market expectations “that the Chinese authorities will put in place significant stimulus measures”.
