Oil drops, but heads for 2023 highs, boosted by economic optimism

At the start of trading this week, the barrel Brentthe European benchmark, fell 1.26% to $84.20, while the European benchmark West Texasthe US benchmark, fell 1.27% to $78.85. Although the falls were recorded during the session, the “black gold” recovered most of its losses. The “black gold” recovered most of its earlier losses and had a good run after a poor start to the year.

” Without a doubt, Increased optimism about the economy plays an important role. in this, with the prospect of fewer rate increases and maybe even cuts before the end of the year, which makes the headwinds less fierce,” says Craig Erlam, senior market analyst at Oanda.

The website Reopening of China also plays an important role in oil recovery. Demand for the Asian giant continues to rise and forecasts are growing as Lunar New Year approaches, when millions of trips are expected.

“While there is still a lot of optimism around Chinese demand, in the short term, the oil market remains relatively well supplied.ING analysts point out that “in the short term, the oil market remains relatively well supplied.

“Of course, it’s hard to get a real indicator of the disruption the current wave is having on the economy, but…”. there is no lack of optimism for the rest of the year, especially for the second half.. It could even arrive as early as the second trimester, although that largely depends on how fast it spreads now. Brent could now stabilize in the $85-90 range, with WTI a little lower around $80-85,” Erlam predicts.

This week the The Organization of the Petroleum Exporting Countries and the International Energy Agency. will publish its monthly report and investors will also be attentive to the development of the European economy. Bank of Japan (BoJ) monetary policy meeting..