June 5, 2024 (Investorideas.com Newswire) Oil prices are trying to recover today after a series of sharp losses extending for five days in a row, with slight gains of 0.35% for both major benchmarks, Brent and West Texas Intermediate (WIT), which reached their lowest levels since last February yesterday.
Oil prices' attempt to rebound came with the positive surprise of services activities in China, which grew at the fastest pace in ten months. This was in light of the improvement in domestic demand and the acceleration of exports significantly this year, while new business inflows grew at the fastest pace since May of last year, according to the May’s Caixin / S&P Global services PMI report.
While the report also indicated that positive sentiment in the services sector remains low and fell to the lowest level in seven months in light of concerns about the future of the global economy and inflation.
India also recorded a slowdown in the expansion of services activities, with a slowdown in internal demand. However, on the other hand, as in China, we witnessed the growth of export orders to the highest historical level since the inception of the index in 2014, according to the services PMI report of HSBC / S&P Global.
Yesterday also, we witnessed a greater than expected decline to the lowest level in three years for available job openings (JOLTS) in the US, and this ultimately prompted an increase in the possibility of an interest rate cut next September, which has become more than 60% likely and more than 75% in November.
A combination of these numbers reinforces hope that the global economy can recover, which may help support demand for oil to fill the oversupply gap that appears to be widening. As yesterday we witnessed a larger than expected accumulation of crude stocks in the United States by more than 4 million barrels last week, according to the American Petroleum Institute (API), which was a negative factor for the markets in addition to those were came out with the recent OPEC+ meeting, in which member states decided to start phasing out the voluntary production cut next October.
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