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Crude oil prices rose more than 3% on Tuesday, recouping some of their sharp losses in the previous session, after China’s central bank cut its key short-term lending rate in an effort to spark a lackluster post-COVID economic recovery.
the people The Bank of China lowered the seven-day repo rate to 1.9% from 2%, which in turn could lower the main China loan interest rate, which is due for release next week.
Concern about demand from China has been cited as an important factor in weaker crude prices this year, but the People’s Bank of China (PBOC) move has traders holding onto hopes that a more dovish policy could mean stronger growth next year.
Crude oil then extended its rally after data showed US inflation slowed slightly in May, cementing the Federal Reserve’s stance to halt rate hikes at this week’s FOMC meeting.
Nymex Crude (CL1:COM) settled in the first month for July delivery +3.4% to $69.42 a barrel, rebounding from its lowest settlement in nearly three months. August Brent Crude (CO1:COM) closed as well. +3.4% to $74.29 a barrel, after yesterday hitting the lowest closing level since December 2021.
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Bloomberg reported on Tuesday that the United States plans to buy nearly 12 million barrels of oil this year as it begins to refill depleted emergency reserves amid lower crude prices.
Analysts say the Biden administration could look to replenish the reserves in series Small nibbles instead of big bitesPossibly to reduce the upward pressure on Crude Oil in the summer driving season.
The Strategic Petroleum Reserve capacity is at 700 million barrels, the lowest level in 40 years, after a decline of 180 million barrels last year.
OPEC also kept its 2023 forecast for global oil demand growth steady for the fourth month, the latest one. Monthly oil market reportHowever, he warned that the global economy is facing increasing uncertainty and slowing growth in the second half of this year.
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