Oil prices surged after Russia and Saudi Arabia extended their production cuts for the remainder of the year. The strategy has sustained the market’s climb until now and has lifted prices from this year’s dip.
As a result, crude prices could continue to see new highs this year even though traders could continue to monitor the demand side.
In this regard, the market was briefly under pressure earlier in the day as traders reacted to a series of weaker-than-expected data in Europe and China.
In the Eurozone, PMI figures showed a faster-than-expected decline in economic activity which could affect demand expectations from the area.
The eurozone continues to see weak economic growth and high inflation and remains exposed to the ECB’s monetary policy. The European Central Bank could raise interest rates again to fight inflation and could affect demand for oil in the process.
In China, services PMI figures showed a slowdown in activity levels, adding to the concerns about the Chinese economic recovery and its impact on oil demand. Traders could remain focused on any new measures from the Chinese government to boost the economy.
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