🛢️ Crude Oil Price Surge as Global Stimulus Measures and China’s Economic Policies Boost Demand
🌍 Global Stimulus Efforts
Major economies, including the US and China, are rolling out or planning significant stimulus initiatives to counteract sluggish growth. These measures—ranging from increased infrastructure investments to tax incentives—are expected to spur economic activity, driving higher energy demand as a result.
👉China’s Economic Recovery
•Chinese President Xi Jinping has stated that China will be more proactive in implementing measures to stimulate economic growth in 2025.
•This announcement has significant implications for the global economy, as China is a major consumer of commodities and a key driver of global economic growth.
•Proactive measures could include increased government spending, tax cuts, or other policies aimed at boosting economic activity.
•China, the leading global importer of oil, plays a pivotal role in shaping oil demand. Anticipation of large-scale economic stimulus efforts, particularly targeting manufacturing and construction sectors, has pushed oil prices upward. If these policies successfully revive economic activity in China, energy consumption is expected to rise significantly.
👉 Positive Sentiment in the US Energy Sector
• Official data on US oil consumption has been released, Increased oil consumption generally indicates a stronger economy, which can boost demand for energy and other commodities.
• Optimism among US oil industry leaders is growing due to potential regulatory reforms aimed at simplifying the permitting process for oil and gas projects. These changes could accelerate the development and expansion of energy initiatives, enhancing domestic production and strengthening the US’s role as a top global energy supplier.
🛢️ OPEC+ Supply Management
Since past 5 months average crude’s inventory decreases, which indicates boost to the prices of crude oil
The OPEC+ coalition continues its strategic oversight of oil output to maintain market balance. By aligning production levels with demand, the group has effectively supported oil prices and mitigated the risk of oversupply.
📌 Factors That Could Limit Price Gains
• Shift to Renewable Energy: The ongoing transition to renewable energy sources such as solar and wind presents a long-term challenge to oil demand. As global economies pivot towards cleaner energy, the oil industry may face declining demand over time. • Economic Concerns: Economic pressures, including rising inflation, recession risks, and higher interest rates, may slow economic growth and reduce oil consumption. These factors could offset some of the recent price gains.
📊Technical Outlook- Crude Oil Price
As we can see in chart a descending triangle pattern is form, which shows a bullish single for prices
In Crude Oil, resistance Zone marked at 6400–6550 indicating a strong supply zone where prices may face selling pressure at those levels. Currently, the price testing this resistance zone.
Whereas, support Zone in crude oil price intact at 6150–5950 whereas if prices retrace, price may find demand and bounce back at those levels.
Until then, Happy Trading!
Commodity Samachar Securities
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