Energy & precious metals - weekly review and outlook
Investing.com — Muted inflation data and yet a still-vibrant U.S. economy: Could oil bulls ask for more? Yes: A dynamic Chinese recovery as well.
A flurry of economic data from China in the coming week is expected to show its post-pandemic bounce is quickly fizzling out, raising expectations that the world’s largest oil importer needs to unveil more stimulus measures soon to shore up activity and shaky consumer confidence.
After a strong start to the year following the dismantling of tough COVID-19 measures, recent data have pointed to a sharp loss of economic momentum due to weak demand at home and abroad and a protracted slump in the country's property market, traditionally a significant growth driver.
That could be the worst challenge now to oil longs who seem to have most of everything they need for that summer rally they had long awaited.
China’s apparent petroleum demand — refinery runs plus net oil product imports — was up 25% and 17% year over year in April and May respectively, according to figures from data provider CEIC. Diesel production in May was 26% higher than a year earlier, and a full 40% higher than in May 2019 before the pandemic hit.
Given how bad things are right now in China’s property sector, that is an astonishing figure. Property investment in May was 21% lower than in May 2022. At the same time, highway transport remains lackluster. Freight turnover is still below late 2019 levels, and highway passenger transport turnover, in person-kilometer terms, is still less than half pre-pandemic levels. Domestic air traffic has recovered more rapidly but, as a portion of China’s total petroleum consumption, jet fuel remains small relative to diesel and gasoline.
The Wall Street Journal last week offered
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