China's economic data will set the tone for the week – Commerzbank
At the beginning of next week, there will be all kinds of economic data from China to ‘work through’, Commerzbank’s commodity analyst Barbara Lambrecht notes.
Data is unlikely to provide a significant boost to oil prices
“Industrial production, retail sales, fixed asset investment, and new home sales will all provide insight into the current state of the Chinese economy. Its weakness is likely to have continued until recently. In the oil market, the focus is likely to be on crude oil processing. The significant increase in Chinese crude oil imports in August would suggest a recovery in processing.”
“In its monthly report, the International Energy Agency (IEA) pointed out that crack spreads in the product markets were lower than at this time of the year in recent years. Secondly, the IEA has once again revised its forecast for Chinese demand growth downwards: It now expects an increase of just under 200,000 barrels per day, down from 700,000 barrels per day at the beginning of the year, which was actually slightly higher than the average increase over the past decade.”
“Both of these factors argue against a significant increase in crude processing, which was less than 14 million barrels per day in July, the lowest level since October 2022. As such, the data is unlikely to provide a significant boost to oil prices.”
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FXStreet Insights Team
FXStreet
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