China’s Strong Economic Growth Predicted to Boost Crude Oil Prices, Despite Global Slowdown Concerns

Crude oil futures ended higher on Tuesday (Jan 17) following the release of positive GDP figures from China. The economic growth in China is expected to increase demand for oil and boost the economy.

  • WTI crude futures rose 32 cents, or 0.4%, to settle at $80.18 a barrel.
  • BRENT crude futures rose 64 cents, or 0.75%, to settle at $85.92 a barrel.

China’s National Bureau of Statistics (NBS) announced on Tuesday (Jan 17) that the country’s GDP rose 3% in 2022, beating analysts’ expectations of a 2.8% growth annually. This positive economic data, coupled with better-than-expected figures for industrial production and retail sales, have raised expectations that the Chinese economy will continue to grow stronger in 2023.

Jones Lang LaSalle analysts noted that the strong economic growth in China is likely to drive up demand for oil and boost the global economy. However, recession concerns continue to be a factor in the market. The Federal Reserve Bank of New York’s Empire State Manufacturing Index dropped to -32.9 in January, the lowest level since May 2020 and below analysts’ expectations. This indicates a contraction in New York manufacturing due to sluggish demand, leading to a slowdown in new orders and employment in the New York manufacturing sector.

Additionally, a global survey of CEOs conducted by PricewaterhouseCoopers (PwC) found that the majority (73%) of CEOs predict that global economic growth will slow in 2023, marking the worst outlook for the global economy since PwC began conducting surveys in 2011.

Despite these concerns, the strong economic data from China is expected to have a positive impact on crude oil prices, as it will drive up the demand for oil. However, as always, investors should closely monitor market developments and economic indicators to stay informed about the current state of the market.

The Spot Market is Open

Wednesday, January 18, 2023

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
11.20

80.74

+0.56

+0.70%

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