Oil prices move little in anticipation of more China signals


Oil prices are being held tight today amid concerns about high inflation and Fed rate hikes. Meanwhile, traders await more demand cues from China's economic headlines this week. All news reports in this article are compiled from investing.com.

Oil prices today, February 27, 2023

 

China’s February PMI reading is due on Wednesday. The January reading has shown a mixed recovery in the world’s biggest crude importer, even as China eased most of its anti-covid measures earlier this year. Wednesday’s data is expected to show that the manufacturing sector was in contraction territory in February. The sector has been hardest hit by lockdowns during the three-year pandemic, and is also facing slowing foreign demand. Brent crude futures rose about 0.1% to $82.90 a barrel, while WTI crude gained 0.2% to $76.45 a barrel. Meanwhile, the recovery in China is expected to push global crude demand to its highest level this year. Markets are also growing uncertain about the timing of such a recovery, given that the country is struggling with its own high number of Covid-19 cases. Slowing inflation data and weak manufacturing activity have also cast doubt on an immediate rebound in China. Mixed signals on demand, coupled with concerns over rising interest rates have slowed economic growth seeing oil prices trading lower for now. 


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The biggest sources of concern in the market are a stronger dollar and a hawkish Federal Reserve, following a stronger-than-expected U.S. inflation print. A strong reading on the personal CPI index in January furthered this idea. The focus this week will be on U.S. nonfarm payrolls data due on Friday, which is expected to show resilience in the jobs market. ‘ The dollar stood near its highest level in two months against a basket of currencies on Monday. Markets are concerned that rising interest rates could hurt economic activity and slow demand for crude oil worldwide. A series of weekly U.S. inventory builds have also raised concerns about slowing demand in the world’s largest oil consumer. However, the prospect of tighter global supplies has supported crude prices recently. Media reports suggest that Russia’s planned supply cuts will be deeper than previously announced, as the world’s third-largest oil producer addresses a price cap on its crude exports.

 


Warning !

 

This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.


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