China to the rescue! crude oil prices are steady on Tuesday

Chinese oil imports in August

Oil prices remain steady on Tuesday, despite the worrying trend that analysts saw on Monday.

Having debated the health of China’s economy for weeks, if not months, it’s now clear for analysts that China’s oil imports are showing the signs of recovery in spite of the country tapping its strategic petroleum reserves to curb the rising prices.

China has already attributed the high price of raw materials that is directly related to the high oil price to its slow rate of economic growth from July to August. The sudden outbreaks of clusters of the Delta variant, meanwhile, dealt a severe blow to reviving its vast economy.

China, however, managed to control the outbreak successfully and take steps to power up the engines of growth, amidst the worries about the health of its property market.

The encouraging data from China regarding the oil imports may have boosted the investor’s confidence in the crude oil markets, reflected by modest rises in oil price.

Both the API, American Petroleum Institute, and the EIA, US Energy Information Administration, are, meanwhile, going to release the data on US crude oil inventories and analysts hope they may be consistent with their previous data that showed a substantial fall.

The data that comes from the world’s two largest oil consumers is going to keep up the momentum in the crude oil markets, unless something dramatic takes place in the Middle East; investors and analysts are still worried about the security threats faced by Saudi Arabia, the world’s top oil exporter.

Today, for instance, there was an attempt by Houthi explosive-drones to attack the targets in an Oil-rich region in the Kingdom; Saudis have managed to thwart the attack. Yesterday, the Houthis tried to use explosive-laden boats to attack the Kingdom by sea. It was disrupted too.

In the absence of an effective, modern air-defence system, the Saudis and the Arab coalition have to rely on the law of probability to keep the threat at bay rather than outright elimination.

Up until a permanent solution is fount, the crude oil analysts have to take the Saudi pulse on board for years to come.




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