Oil Prices Jump On China Inflation Data

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Oil Prices Jump On China Inflation Data

Oil Prices Jump Higher Post-China'S Inflation Data

rebound was seen in the oil prices as Monday's session came to a close after the release of mixed inflation data from China. Up ahead is the US inflation data, which will have a more serious impact on oil prices.

Overall, a 0.7% jump was seen in the Brent Oil futures, while the WTI futures showed an upside of 0.8%. After these gains, the Brent futures were seen trading at $83.33, while the WTI futures were seen at $78.85.

China'S Data Offers Little Support

closer look at China's inflation showed mixed readings, which is why only a little upside was seen in the oil prices. The CPI, in particular, showed a sustained recovery, a sign that China's stimulus measures are finally showing its effect on the economy.

However, the highlight of China's inflation data was the producer price index inflation, which showed a decline for the 19th month in a row. According to experts, the business & factory activity in China remains weak.

What truly makes China's inflation data so crucial for oil prices is the fact that China is still one of the biggest importers of crude oil.

For the month of April, a significant decline was seen in the crude oil imports compared with last month. If we compare this month's data with April 2023, the reading remained flat, which also hints at a sluggish economic recovery.

Meanwhile, a major oil town in Canada faces an out-of-control fire, which is expected to affect the oil production & supply. Back in 2016, a similar wildfire forced around 90K citizens to evacuate the area and cut around 1 million barrels/day from production.

According to Goldman Sachs, OPEC+ will likely reverse its decision to make voluntary production cuts starting next month. As for Saudi Arabia, the country's oil supply will remain at 9 million barrels per day with no change.

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