WTI tries to establish itself above $75.00

• The price of oil has soared above $75 on hopes of a The CEO The IEA said that half of the growth in global oil demand this year will come from China.
• Investors should prepare for hawkish guidance on interest rates in the Fed’s Powell speech.

He West Texas Intermediate (WTI) it has breached the critical resistance of $75.00 in the Asian session, reaching a two-day high of $75.21. Black gold rallied sharply after falling to almost two-month lows at $72.50 in yesterday’s American session.

The oil price recovery movement was extremely strong despite the cautious market sentiment. Meanwhile, the Dollar Index (DXY) has corrected to near 103.40/45 after marking a fresh four-week high yesterday at 103.70. After three days of strong gains, the dollar index is expected to show sideways action ahead of Federal Reserve (Fed) Chairman Jerome Powell’s speech scheduled for Tuesday.

Growing fears of a US recession have already dampened demand for oil over the past year. And a further decline in oil orders seems likely on expectations that the Fed will raise interest rates amid the skyrocketing employment in the US labor market in January. Rising US jobs figures despite slowing activity have aggravated the battle against inflation. Stronger-than-expected new labor additions could fuel a rebound in the downward trend of the US Consumer Price Index (CPI).

Meanwhile, International Energy Agency (IEA) chief executive Fatih Birol’s comment on the sidelines of India’s Energy Week conference on Sunday that “oil producers may have to reconsider its production policies after a recovery in demand in China, the world’s second-largest oil consumer,” Reuters reported, has given oil bulls an adrenaline rush. And he added: “Half of the growth in global oil demand this year will come from China.”

For more information, investors will be watching US American Petroleum Institute (API) oil stocks data for the week ending February 3.