West Texas Intermediate (WTI) futures on NYMEX posted a fresh weekly high near $68.00 on Monday, with the benchmark crude oil price strengthening on hopes that China’s fresh monetary stimulus plan will boost domestic consumption.
On Sunday, the Chinese ministry announced a comprehensive “special action plan” to ramp up economic growth. The ministry reported that the plan focuses on increasing residents’ incomes, reducing financial burdens, and enhancing the consumption environment, Reuters report.
Such a scenario is favourable for the oil price given that China is the largest crude importer in the world. Meanwhile, China’s upbeat retail sales data for February has also offered some strength in the oil price. Retail sales, a key measure of consumer spending, rose by 4%, as expected.
Going forward, investors will focus on US President Donald Trump’s talks with Russian leader Vladimir Putin on Tuesday to discuss over a temporary ceasefire with Ukraine. Last week, Ukraine agreed for a 30-day ceasefire after discussing with US officials in Saudi Arabia.
This week, investors will also focus on the Federal Reserve’s monetary policy decision, which will be announced on Wednesday. The Fed is almost certain to keep interest rates steady in the range of 4.25-4.50% for the second time in a row.
(Source: OANDA)