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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

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Market Resilience: Oil Prices Hold onto Gains Amid Optimistic China Trade Figures

Oil Prices Hold onto Gains Amid Optimistic China Trade Figures
Oil Prices Hold onto Gains Amid Optimistic China Trade Figures

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Oil Prices Hold onto Gains Amid Optimistic China Trade Figures

On March 7, oil prices demonstrated stability, maintaining the gains from the previous day fueled by positive developments. Encouraging Chinese trade data and a U.S. report revealing a smaller-than-expected increase in crude inventories and significant draws in fuel stocks contributed to the favorable market conditions. However, the potential delay in U.S. interest rate cuts acted as a limiting factor for further price increases.

Brent crude futures experienced a marginal decline of 4 cents, settling at $82.92 per barrel by 0432 GMT. Concurrently, U.S. West Texas Intermediate (WTI) crude futures saw a modest decrease of 1 cent, reaching $79.12 per barrel. Despite China surpassing estimates in import and export growth, concerns regarding potential delays in U.S. interest rate cuts restrained the upward momentum in oil prices.

Independent analyst Tina Teng, based in Auckland, acknowledged the positive impact of China’s trade balance data on the oil market’s demand outlook. However, she highlighted a prevailing risk-off sentiment in financial markets, notably observed with a retreat in stock prices on Wall Street.

China, the world’s leading crude importer, reported a 5.1% increase in imports during the first two months of 2024 compared to the same period last year, reaching approximately 10.74 million barrels per day (bpd). Customs data revealed that refiners boosted crude purchases to meet fuel demand during the Lunar New Year holiday. Concurrently, China’s refined product exports for January-February recorded a 30.6% year-on-year decline to 8.82 million tons, leading to reduced supplies for global markets.

The upbeat trade data from China, the second-largest global economy, signifies a potential turning point in global trade dynamics, encouraging policymakers striving to support a hesitant economic recovery.

Oil prices had experienced a modest increase of about 1% the previous day, responding to U.S. Energy Information Administration (EIA) data indicating the sixth consecutive weekly rise in crude inventories. However, the actual increase of 1.4 million barrels was two-thirds of the 2.1 million-barrel rise projected in a Reuters poll. Notably, gasoline and distillate stocks recorded larger-than-expected declines.

The outlook for oil prices is intricately linked to the anticipation of U.S. interest rate cuts, with a prevailing expectation of a strong U.S. dollar in the short term. A Reuters poll of foreign exchange strategists indicates that markets are preparing for the potential delay of the U.S. Federal Reserve’s first interest rate cut to the second half of this year. Fed Chair Jerome Powell underscored the uncertainty in progress on inflation, reiterating the central bank’s anticipation of reducing its benchmark interest rate later in the year.


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