WTI oil increased after Tuesday's 2% fall. It happened because the mixed earnings and weakening business activity caused fear of a possible slowdown in the U.S. economy. However, the removal of anti-COVID restrictions in China strengthened expectations that energy demand will finally grow.
Delegates from the OPEC expect that when the committee of ministers meets next week, it will recommend no change to the current level of oil production.
Market strategist at IG Asia Pte Yeap Jun Rong said that the prices for black gold aim to compensate for the losses, which followed the weak PMI U.S. data on Tuesday. Nevertheless, much is still unknown, and therefore, there is no certainty.
Currently, there is a non-working week in China related to the celebration of the Lunar New Year, when citizens traditionally return to their hometowns. The number of trips has increased, but this also means the risk of a growing incidence of coronavirus.
Further understanding of the market situation will be possible after major oil companies report for the past quarter. Chevron should be the first to provide its data on Friday.