- China imported 11.8 million barrels per day (BPD) of oil in the last month, 5.5% higher than in August
- Oil demand is driven primarily by China, Commerzbank’s analysts wrote
- Crude oil prices moved over 2.2% higher to hit $40.50 per barrel today
Crude oil prices recovered today, fueled by strong data in China. However, the data from the rest of the world show fading demand and supply renewals in Norway, Libya and the Gulf of Mexico capped the gains.
Fundamental analysis: China helps crude
China, the number one crude oil importer in the world, imported 11.8 million barrels per day (BPD) of oil in the last month. This is 5.5% higher than in August and up 17.5% from September 2019, according to data from customs.
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“Currently, oil demand is driven primarily by China,” Commerzbank said in a note.
The International Energy Agency (IEA) said a vaccine could prompt rebound in the economy on a global level next year while energy demand could go back to its old levels by 2023.
“The era of global oil demand growth will come to an end within the next 10 years, but in the absence in a large shift in government policies, I don’t see a clear sign of a peak,” IEA Executive Director Fatih Birol.
Meanwhile, the UK and the Czech Republic have reintroduced some lockdown measures to curb the increase in the number of new coronaviruses cases, and French Prime Minister Jean Castex said he could not exclude local lockdowns.
Oil platforms in the Gulf of Mexico have welcomed back the workers following the recent Hurricane Delta, while restarted its operations at its Sharara oilfield after a force majeure.
Libya’s total oil production was projected to reach 355,000 bpd and a full return of the 300,000-bpd Sharara field would almost double that figure.
Technical analysis: Oil up 2%
Crude oil prices moved up over 2.2% to hit $40.50 per barrel. The portion of losses from the last two days have now been erased to allow oil prices to trade above the $40 mark once again.
Crude oil daily chart (TradingView)
The 200-DMA comes in at $39.93, with a daily close above this level opening a door for higher levels. In this case, oil traders are likely to aim for $42.30, which hosts horizontal resistance.
Crude oil prices recovered today on strong trade data in China but the concerns about the weak demand in other regions of the world and supply recommencement in the Gulf of Mexico, Norway and Libya limited the gains.