Chinese industrial production growth to support Brent prices

17 May 2024 76
Nikolai
Nikolai

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1st in the segment "Oil and gas"
Chinese industrial production growth to support Brent prices

This morning new data was released on China's industrial production for April. Since the beginning of the year, there have been many concerns about a sharp slowdown in China's economic growth.

 

This country is one of the world's largest consumers of commodities, including crude oil and petroleum products.

The slowdown in economic development has reduced demand for oil, putting downward pressure on prices.

Today's report showed that China's industrial production in April was 6.6%, compared to the forecast of 5.5% and the previous March figure of 4.5%.

 

The YTD industrial production (year-on-year) was 6.3%, up from 6.1% in March.

In addition to the increase in industrial production, China's unemployment rate fell to 5.0% from 5.2%. At the same time, the forecast estimate of the unemployment rate was 0.2% higher than the actual figure.

 

Such optimistic data is likely to allay fears of skeptics regarding the prospects of China's development, which may also indicate an increase in demand for commodities, including Brent crude oil.

 

OPEC+ meeting scheduled for June 1 will probably result in extending the agreement to cut oil supply and, as mentioned above, will trigger a rebound in Brent prices to retest the 85.0 level.

 

From a technical point of view, in addition to the previously drawn head and shoulders pattern on the Brent chart, one should pay attention to the broken ascending support line, which the price is likely to test again and return to the 85.0 dollars per barrel mark.

 

The overall recommendation is to buy Brent oil.

Profit should be taken at the level of 85.0. Stop the loss at 80.0.

The value of possible loss should not exceed 2% of your deposit funds.

This content is for informational purposes only and is not intended to be investing advice.

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Nikolai
Nikolai

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1st in the segment "Oil and gas"
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