Oil Rises as Energy Demands Perks Up on China Stimulus and US Inventories

Energy prices jumped close to 3 percent on Tuesday. Brent gained 2.76 percent and WTI 3.07 percent as China is said to be looking at policies to boost economic growth. The US-China trade war has dented global growth expectations and this move by Chinese authorities is helping energy demand forecasts rise.

West Texas Intermediate graph

Trade data out of China this week was not positive with drops in exports and imports showing a clear impact of US tariffs. Beijing is hoping fiscal stimulus can overcome the stagnation.

Brent crude graph

OPEC members and other major producers remain committed to a production cut that will last six months. If the US and China can work out their differences the agreement might not extend beyond that period as global growth regains traction.

Wednesday’s weekly crude stock report is expected to show another drawdown in the United States. A drop in inventories and colder for longer weather will boost oil prices.

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza