Optimism from China, Iraq drives crude oil price up

WTI crude increased on expectations of greater fuel consumption during the busy holiday travel season in China. The anticipated production cuts by the OPEC+ producing group may make the oil market more competitive.

WTI crude oil prices increased further during the middle of Monday’s US trading session, reaching $78.78 per barrel and increasing by 1.13%. The price has broken through the 20 and 50-day EMAs, showing bullish momentum, and buyers are now aiming for the $80.00 per barrel level.

The market was supported by growing hope that China’s May Day holiday will boost travel and fuel demand. Bookings for international vacations around the May Day holiday kept increasing, although they are still far below pre-Covid levels.

Although oil prices jumped, the uneven economic recovery in China from the Covid-19 pandemic keeps oil prices fluctuating.

In addition to the anticipated increase in demand brought on by the holiday season in China, production cuts by OPEC+ have also helped to drive up the price of WTI crude oil. The group will reconvene in May 2023 with the intention of further reducing output.

The fact that Iraq’s northern oil exports are showing few signs of starting up again after a month-long halt is another factor supporting the increase in WTI, according to four sources. This is because an agreement between Baghdad and the Kurdistan Regional Government (KRG) has not yet been fully addressed.