WTI rises above $42 in US stimulus expectations
- WTI prints gains on renewed hopes for additional US stimulus.
- China's factory deflation eased in July, adding to bullish pressure around oil.
The American benchmark for the sweet light crude gained ground during Tuesday’s Asian trading hours in hopes for additional US coronavirus stimulus and signs of recovery in China, the world’s second-largest economy.
At press time, a barrel of West Texas Intermediate (WTI) is trading near $42.15, representing 0.5% gain. Prices rose by nearly 1% on Monday.
The black gold picked up a bid after President Trump tweeted Monday that top congressional Democrats wanted to meet him for discussing virus-related economic relief. The talks between Democrats and the Trump administration broke down last week, according to Reuters.
And yet hopes for additional stimulus may not be the only reason for the uptick in oil. Additional bullish pressure looks to be stemming from comments made by Saudi Aramco on Sunday that oil demand is rebounding in Asia with the gradual reopening of economies.
In addition, oil markets seem to be cheering the upbeat China producer price index (PPI) released on Monday, which showed factory deflation eased for the second month in July.
Gains, however, could be capped by lingering US-China tensions. As per the latest reports, China has unveiled a slew of policies to help boost the domestic semiconductor industry. The move comes after the US’ latest sanctions on Huawei exposed China’s reliance on external chipmakers.
Technical levels