Prices of oil went up today, driven by the signals of supply reduction and demand fundamentals, but a message of an overly upbeat forecast for China’s economic expansion had a bit of a cooling effect on markets.
Brent futures, the global reference for prices of oil, gained 0.4% from the last settlement reaching $57.45 this morning.
U.S. WTI futures rose 0.5% attaining $51.54 for a barrel. Price growth followed a slump of over 1% during a preceding day.
This event was attributed to profit-taking after several days of growth, as well as to an unexpected drop that alarmed traders in the wake of the China’s central bank governor, who is soon to leave his post, mentioned Minsky moment, too much upbeat forecasts of economic expansion fueled by extensive debt and speculative investment.
He is probably trying to draw attention to the impossibility of sustaining such a pace because it’d mean a continuing rise of the country’s debt-GDP ratio and eventually inevitable deceleration, Shane Oliver of Sydney’s AMP Capital said.