Key points
- China stimulus prospects reinforce oil demand prospects
- Central bank decisions eyed with focus on rate outlook
- WTI Crude Oil futures extend a gain from the prior week
Futures on US West Texas Intermediate Crude Oil extended last week’s gains on Monday, reflecting tightening conditions as OPEC+ output cuts impact the market.
Prospects of Chinese stimulus measures to prop up post-COVID recovery also supported oil prices.
China’s National Development and Reform Commission on Monday announced measures aimed to bolster private investment in some infrastructure sectors and said financing support for private projects would also be increased.
Meanwhile, policy decisions by major central banks will be in the spotlight this week. The Federal Reserve on Wednesday and the European Central Bank on Thursday are both expected to hike benchmark interest rates by 25 basis points. Market players will also be looking for clues both central banks may provide in regard to their September meetings.
Higher interest rates have bolstered bond yields and the US Dollar, while weighing on dollar-priced commodities such as Oil.
“While another Fed rate hike this week may drive some short-term price volatility, we expect tightening market conditions on OPEC’s supply cuts and increasing market speculation of further stimulus in China to continue to push prices higher through 3Q23,” National Australian Bank analysts wrote in an investor note, cited by Reuters.
As of 12:46 GMT on Monday WTI Crude Oil Futures for September delivery were gaining 1.00% to trade at $77.84 per barrel.
At the same time, Brent Oil Futures for October delivery were gaining 0.87% on the day to trade at $81.58 per barrel.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
