HomeIndustriesOil Slides Following Release of Weaker Economic Data

Oil Slides Following Release of Weaker Economic Data

Oil backtracked from its recent gains on Wednesday following the release of weaker economic data, thereby overshadowing a recent surge in optimism due to China’s resurgent economy. West Texas Intermediate declined by over a dollar one day after reaching its highest intraday price since December 5.

Declines were limited, however, following comments from the International Energy Agency explaining that global oil consumption is estimated to reach a record daily average this year, with about half of the growth stemming from China.

Following the information included in the IEA’s latest outlook, Saudi Aramco confirmed its agreement, expressing cautious optimism that consumption is set to embark on an upward trend this year.

“Two wild cards dominate the 2023 oil market outlook: Russia and China,” the IEA’s report read. “The well-supplied oil balance at the start of 2023 could quickly tighten however as Western sanctions impact Russian exports.”

As prices continue to rise as a whole, optimism across the market continues to strengthen. This rising investor confidence has helped to boost liquidity in the oil market, with total oil futures open interest reaching their highest figures in over six months.

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