homemarket Newscommodities NewsCrude oil prices surge to 9 month high amid supply cuts and China's economic recovery, expert insights
Crude oil prices surge to 9-month high amid supply cuts and China's economic recovery, expert insights
Crude oil prices have hit a 9 month high on expectations of additional supply cuts by major oil producers like Saudi Arabia and Russia. The prices have surged by 7 percent in the past one week alone and about 25 percent so far this year. China's signs of economic recovery have also given a boost to crude.
Crude oil prices have hit a 9-month high on expectations of additional supply cuts by major oil producers like Saudi Arabia and Russia. The prices have surged by 7 percent in the past week alone and about 25 percent so far this year. China's signs of economic recovery have also given a boost to crude.
Ole Hansen, head of commodity strategy at Saxo Bank, shared his insights on the current situation in an interview with CNBC-TV18. He emphasised, "The cuts from Saudi Arabia and also from Russia are certainly the main driver for the sentiment right now. Also, the demand from China is not showing any signs of peaking at this point. So, the demand outlook remains strong as well."
China's economic activity has long been a bellwether for the global commodity markets, and crude oil is no exception. Jonathan Barratt, chief investment officer at Probis Securities, highlighted the importance of China's role in shaping the crude oil landscape.
He explained, "If you do see China starting to lift its game in terms of its stimulus, then that's really going to put a bit of a shift in the demand for crude oil. And let's look at it this way: if you just see domestic travel in China pick up by 15 to 20 percent, you are going to see a significant draw on fuel, and that's certainly going to support prices."
Barratt further speculated, "So, the Chinese, depending on how hard and fast they go on stimulus, I think, is also a major factor in seeing crude oil prices break through US $90, and I think in the next quarter could even head up to $100-100 plus."
This bullish sentiment in the crude oil market comes at a time when other commodities like gold and silver are experiencing mixed fortunes. While prices of both precious metals have recently reached one-month highs, they remain under pressure due to the strengthening of the US dollar index, which has climbed back above the 104 mark.
Over the past month, gold prices have declined by approximately half a percent, and silver prices have witnessed a more substantial drop of 5 percent.
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