WTI Crude Oil Dips After Cautious Optimism – China’s GDP in Focus
WTI crude oil prices made slight gains early on Monday in anticipation of China's GDP and dipped on the release of the data, which came in
WTI crude oil prices made slight gains early on Monday in anticipation of China’s GDP and dipped on the release of the data, which came in slightly below expectations. At the time of writing, WTI crude oil is trading at around $40.72 per barrel.
Economists expected the third quarter GDP to touch 5.2% YoY, indicating an improvement in consumer demand even as overseas trade rebounded as other countries around the world emerged out of lockdowns. The Q3 GDP, however, came in at 4.9% instead, still indicating economic recovery in China. A growing economy requires more oil, and China being the world’s second largest energy consumer, can help ease concerns about the weakness in oil demand globally.
WTI crude oil ended the previous week on a bullish note, having gained 0.7% as a result of a greater than expected decline in US crude Inventories. OPEC and its allies’ full compliance with the deeper supply cuts during September also helped support oil prices over the past week.
However, the overall sentiment in oil markets remains tense as traders worry about the impact of the coronavirus pandemic on global oil demand.
With leading oil producing nations revising demand forecasts lower and several countries battling a second wave with fresh restrictions, oil demand is expected to remain weak for longer time than previously anticipated.
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