July 25, 2023 (MLN): Oil prices continued the upward trajectory amid supply concerns and the optimism of Chinese stimulus outweighing more rate hikes from U.S. and European central banks.
Brent crude is currently trading at $82.64 per barrel, up by 0.14% on the day.
While West Texas Intermediate crude (WTI) is trading at $78.85 per barrel, up by 0.09% on the day.
It is worth noting that this rise follows four consecutive weekly gains, and in this week alone, Brent crude and WTI have increased by 2.75% and 2.88% respectively.
"Energy traders are growing confident that global central bank tightening will soon come to an end, which should provide some support for global growth," said Edward Moya, an analyst at OANDA, as Reuters reported.
In China, the world's second-largest economy and second-biggest oil consumer, leaders pledged to step up policy support for the economy amid a tortuous post-COVID recovery, focusing on boosting domestic demand.
Still, bearish data in the eurozone and the U.S. underlined weakness across the global economy.
In the eurozone, business activity shrank much more than expected in July as demand in the bloc's dominant services industry declined while factory output fell at the fastest pace since COVID-19 first took hold, a survey showed.
In the U.S., business activity slowed to a five-month low in July, dragged down by decelerating service-sector growth, closely watched survey data showed, but falling input prices and slower hiring indicate the Federal Reserve could be making progress on important fronts in its bid to reduce inflation.
Investors have priced in quarter-point hikes from the Fed and European Central Bank (ECB) this week, so the focus will be on what Fed Chair Jerome Powell and ECB President Christine Lagarde say about future rate increases.
