Oil continued to rise for the third day in a row amid signs of a strong recovery in China and new signs that the Federal Reserve may stop raising interest rates next summer.
Crude prices got a boost as the macro winds turned late in Thursday’s session with dovish comments from Atlanta Fed President Rafael Bostick.
Confidence in a strong recovery in China supported oil prices while traders grappled with fears of slowing economic growth in the United States and the European Union due to inflationary pressures.
A major market indicator revealed the emergence of a consensus that demand will pressure supply in the market, as the margin between the two nearest futures contracts for Brent crude widened to the highest level since November.
“Oil prices are rising ahead of us and we are now looking at a further recovery in China,” said Bart Melk, head of commodity strategy at TD Securities.
Signs of a strong recovery in the Chinese economy with the end of “Covid” restrictions
Prices have moved in a narrow range so far in March following moving in the narrowest monthly range since mid-2021. Prices are trying hard to rally as oversupply in the first quarter of the year grapples with a belief that the market will see a rebound in the coming months.