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