Crude Oil Ends Its 7-Week Bullish Rally; The Focus Is Now On China
It appears that the crude oil's 7-week bullish rally is finally over. Looking ahead, the oil prices will rely heavily on how much oil China is buying for its economy. So if the Chinese demand is strong, it will keep the crude oil market supported, while a weak demand will lead to more losses.
During Friday's session, the crude prices remained positive and even built on their last-day advance. However, the bullish trend in the last 2 days of the week was not enough to make up for the 3-day long losing streak. In short, the week ended in a loss as the advance of the last 2 days was way below the losses of the first 3 days.
WTI Trades At $81.25
WTI, which is traded on the NY exchange, jumped by 1% on Friday and ended the week near $81.25. Overall, the WTI gained 86 cents which was lower than the 1.3% gain of Thursday. However, let's not forget that WTI prices went down by 4.6% from Mon-Wed.
So if we look at the WTC's price for the week, it lost 2.3% of its value and also ended up wrapping its multi-week bullish rally in the process.
As for the Brent from the London exchange, it also remained positive on Friday with a gain of 0.8% ($0.68) and closed the week near $84.80. Just a day earlier, Brent crude oil also had a similar percentage gain. As for Brent's weekly performance, it lost 2.8% of its value which is around 0.5% higher than the WTI.
The bigger picture is that oil demand in the US will remain stable but fuel consumption may decline. Especially since the summer season is about to end which means less need for air conditioning.
According to one expert from ING, the oil market still has enough room to move higher. In fact, they believe that the conditions of the oil market will improve in 2H2023 with a very high chance of a deficit.