China imported 11.8 million barrels of oil per day (BPD) last month, 5.5% more than in August
The demand for oil is mainly driven by China, wrote Commerzbank analysts
Crude oil prices rose by over 2.2% and today reached $40.50 per barrel
Crude oil prices recovered today, fuelled by strong data from China. However, data from the rest of the world shows declining demand and supply renewals in Norway, Libya and the Gulf of Mexico, which covered the increases.
Fundamental analysis: China helps crude oil
China, the number one crude oil importer in the world, imported 11.8 million barrels of oil per day (BPD) last month. This is 5.5% more than in August and 17.5% more than in September 2019, according to customs data.
“Currently, the demand for oil is mainly driven by China,” Commerzbank said in a press release.
The International Energy Agency (IEA) said that a vaccine next year could lead to a recovery of the economy on a global scale, while energy demand could return to its old levels by 2023.
“The era of growth in global oil demand will come to an end within the next ten years, but since there is no major change in government policy, I see no clear signs of a peak,” said IEA Executive Director Fatih Birol.
Meanwhile, the UK and Czech Republic have reintroduced some lockdown measures to stem the rise in the number of new cases of corona virus, and French Prime Minister Jean Castex said he could not rule out local lockdowns.
Oil rigs in the Gulf of Mexico welcomed workers back after the recent hurricane delta, while operations at their Sharara oil field resumed after force majeure.
Libya’s total oil production was estimated at 355,000 bpd, and a full return of the Sharara field at 300,000 bpd would almost double that figure.
Technical analysis: oil increased by 2%.
Crude oil prices rose by more than 2.2% and reached 40.50 dollars per barrel. Part of the losses of the last two days were now erased, so that oil prices could be traded above the $40 mark again.
Crude Oil Daily Chart (TradingView)
The 200 DMA is $39.93, with a daily closing above this level opening a door to higher levels. In this case, oil traders are likely to target $42.30, which is a horizontal resistance.
Summary
Crude oil prices recovered today due to strong trade data in China, but concerns over weak demand in other regions of the world and the resumption of supply in the Gulf of Mexico, Norway and Libya limited profits.
