Oil Swings with China Demand Outlook and Fed Remarks

Oil fluctuated as traders respond to China’s efforts to revive the economy. Meanwhile there is talks that the US federal reserve may curb further monetary tightening. Today, Fed Chair Jerome Powell is expected to give his semi annual report to congress. While policymakers have so far kept interest rates unchanged, rising interest rates are still forecasted to bring the still-elevated inflation back to target.

Oil dropped this half as China’s reemergence from Covid policies were below expectations in addition to the oversupplied oil market. This has initiated supply cuts from OPEC members, with large reductions by Saudi Arabia to take effect in July. China’s economy is set to stabilize in the next quarter with focus on increased consumption.