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Market Digest Nigeria

Economy

Crude oil prices surge, as China plans to import large volumes of U.S. crude

Crude prices surged higher on Monday at London’s trading session. This bullish run was triggered by news that the second-largest economy (China) will import large volumes of U.S. crude in August and September.

The news has outweighed concerns over a fragile demand recovery after oil output by OPEC+ increased recently.

Brent crude prices gained about 0.71%, to trade at $45.12 a barrel by 05.55 am GMT. Also, U.S. Crude prices gained 0.86% to trade at $42.37 a barrel.

Chinese state-owned energy firms had cumulatively booked oil tankers to transport at least 20 million barrels of U.S. crude for this month and September, as China increased its order on energy and farm purchases ahead of a review of the Sino-U.S. trade deal.

Stephen Innes, the Chief Global Market Strategist at AxiCorp, gave insights on what crude oil traders are focusing on presently. He said:

“China increasing US oil imports is the most apparent trade deal reaffirmation. From a trade talk risk perspective, wiping down the last remnants of escalation risk is favorable for oil prices.“Despite the stimulus package appearing to be in a standstill, the markets appear to be taking the view that major fiscal legislation is inevitable, presumably based on the assumption that the Republicans will eventually accept a somewhat larger package in light of their incentive to support the economy ahead of the November election, where President Trump is trailing in the polls.”

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