Oil prices were reportedly rising slightly in early Asian trade on Monday. This comes ahead of China's economic growth data, which is expected to show a recovery in major importers nowadays. A variety of positive impacts can follow this situation.
The situation also offset concerns about the impact of the virus's rise on consumption and rising oil supplies in various regions. As it is known that some countries decided to restart their production. Now, the condition is under control and back to normal.
This comes after the oil refinery site was hit by Delta Storm. In addition, some time ago there was also a strike by the employees there. When production began to resume but the threat of lockdown re-emerged, this could lower demand.
The Data on the World Market
Brent crude for the December contract was known to rise slightly by 4 cents to $42.97 a barrel. On the other hand, U.S. West Texas Intermediate crude was at $40.90 per barrel. This means it rises 2 cents and occurs the day before the November contract expires.
China will release its third-quarter GDP data at 9 a.m. Many estimate that its economy most likely grew by 5.2% in July-September. That growth is expected to be more than the previous year. It is said by some analysts in the market.
However, the frenzy about China's oil purchases is expected to slow in the fourth quarter amid high inventories. Meanwhile, there is no denying that the million import quotas are limited to independent distillers. That becomes the attention of people.
Brent and WTI Oil Data
Brent oil was reportedly up 0.2% last week. Meanwhile, WTI rose by about 0.7%. The situation comes after crude oil and their supplies in the United States, the world's main consumer country of this commodity, fell last week.
However, discussions last week at a panel of officials from the Organization of Petroleum Exporting Countries Russia and its allies (the group is also known as OPEC+), showed that the outlook for the oil market is worse than it was a month ago. It's actually quite plausible.
The Joint Technical Committee is very concerned about the second wave of the prolonged COVID-19 pandemic. In addition, a surge in Libyan production could push the market into surplus next year. This could be the worst-case scenario in the market.
Opec+ Plan for Oil Supply
Opec+ has already created new rules on existing supplies at the present time. The rule is to add a quota of 2 million barrels per day of oil to the market by 2021. It is hoped that this policy can make supply and stock more balanced.
U.S. Houses of Representatives Speaker Nancy Pelosi said Sunday that she's optimistic about a deal to help the bill. He believes stimulus can be disbursed before Election Day. This means that the assistance must have been provided before November 3.
He remains optimistic despite differences remaining with President Donald Trump's administration on a broad coronavirus aid package. However, many analysts also doubt that such assistance will be provided before the election. The deal is hard to reach until now.
The USD Remains Stable
The U.S. dollar continued to show gains on Monday. This condition is supported by investor concerns about the U.S. election and the uncertain outlook of the previous fiscal stimulus. Meanwhile, the Chinese yuan held strong ahead of the release of GDP data.
The dollar index was reportedly steady in early trading this week. That followed a 0.7% rise last week when a surge in coronavirus cases occurred globally. Uncertainty about the stimulus package also triggered the caution of market participants.
The sensitive Australian and New Zealand dollars showed strong growth in China on Monday. That was quite surprising. The situation comes amid weak expectations that Democrats and the White House will approve a new spending program.