Portents about a looming global recession have been tempered by news out of the States that the futures of West Texas Intermediate (WTI) crude rose above $74 per barrel.
The rebound from weeks-long lows stretching back to the festive season is supported by surprisingly bullish developments in China.
Whereas warnings last year sketched a gloomy start to the New Year because of China’s economic slowdown due to Covid-19 lockdown measures, the world’s largest emerging market is showing progressive signs of recovery.
Related easing by the United States Federal Reserve Bank pulling back from previously feared excessive tightening of interest rates has helped to lift movement across, despite previous doom and gloom warnings.
The party secretary of China’s People’s Bank, Guo Shuqing, has also stated that his country is eager to rekindle its economy through financial aid for struggling households and private sector companies.
It is furthermore reported that Pierre Andurand, hedge fund manager at Andurand Capital, has predicted that the barrel price of WTI crude could actually double this year to about $140.
However, this would be contingent on Asian markets, especially China, fully reopening after last year’s extreme Covid measures, which in many instances brought the supply chain to a complete standstill.
According to Trading Economics, “a slowdown in wage growth (in the US) and a surprise contraction in services activity tempered expectations that the Fed will continue to hike rates aggressively”.
Easing by the Fed is said to have had an immediate effect on the price of WTI crude.
