Brent oil is hovering above $84 a barrel today, after falling 1 percent on Monday.
According to information from Beijing, the Chinese economy grew higher than expected in the fourth quarter as the virus restrictions ended. This development may support investors’ expectations for greater power consumption this year.
Ahead of the data, Goldman Sachs reiterated its argument for higher crude oil prices, arguing that Western economies will avoid stagnation and support consumption as China’s demand improves and Russia’s supply falls. In its January 16 note, the bank said that commodity markets are pricing in a calm they no longer “believe” will happen.
Oil prices, which had a rough start to 2023 and fell in the opening week amid concerns about the global slowdown, have rebounded. Aside from China, oil was also supported by rising expectations that the Fed’s aggressive rate hikes are coming to an end and a weakening dollar.
Ravindra Rao, Head of Commodities Research at Kotak Securities, stated that the virus restrictions are over and said, “Good-than-expected information from China can support prices as the focus is on Chinese demand at the moment.”
