11.08.202012:37 Forex Analysis & Reviews: Partial recovery of oil demand raises oil prices

Crude oil manages to rise again this morning, mainly due to the partial recovery of demand for oil. The head of Saudi Aramco issued a statement saying that demand in some markets have become stable, which could not but please investors. In addition, market participants continue to focus on the creation of new stimulus measures in the United States.

Yesterday, news came out that demand for gasoline and diesel recovered almost to pre-crisis levels in China. It is now at around 90 million barrels per day, and in the near future, may reach 95–96 million barrels per day. Particularly positive analysts believe that this would happen by the end of this year.

At the same time, the US government expresses sincere hope that the issue surrounding the creation of a new stimulus measure will be finalized soon. Hence, Treasury Secretary Steven Mnuchin issued a statement, which, among other things, called on Democrats and Republicans to quickly end their disputes and come to a consensus by the end of this week. Of course, if this happens, oil will receive additional incentives to rise in the market.

Meanwhile, with regards to the epidemiological situation of the world, the latest data reveals that the daily growth rate of coronavirus infections over the past three days has significantly decreased. By Sunday morning last week, it reached 224 thousand, which may signal the gradual retreat of the pandemic.

In particular, the number of new cases in the United States have decreased sharply, with which last Sunday, it did not exceed 50 thousand for the first time.

These data enabled Brent futures for October delivery to rise this morning on the London trading floor, increasing by about 0.49%, or $ 0.22, moving it to a price level of $ 45.21 per barrel. It was able to step over the new strategically and psychologically important level of $ 45 per barrel, and may possibly jump further in the near future.

As for WTI futures for September delivery, price also rushed up at the New York trading floor this morning, increasing about 0.76%, or $ 0.32 per barrel and reaching a price level of $ 42.26 per barrel. Growth was rapid, at about 1.8%, or $ 0.72, with which the closing price consolidated around $ 41.94 per barrel.

Such a rise in the market is, of course, very significant. Losses have been won back, but unfortunately, there is still one more factor that may negatively affect the price of oil. This is the ongoing escalation of conflict between the US and China.

Just yesterday, the Chinese authorities have retaliated against American officials, the reason for which was the sanctions imposed by US President Trump on some high-ranking officials in Hong Kong and China. So far, the situation looks sluggish and does not turn into an aggravated stage, but even this can upset the balance in the raw materials market.

Now, investors are also waiting for a new publication on the level of oil reserves in the United States. The data will be released tomorrow, but today there are no big risks for the market, so, most likely, growth will continue until the end of the day.