Comments from Kevin Muir
China’s economy is sick. No doubt about it. And it’s difficult to say with any certainty whether the latest government stimulus measures will be enough to revive it.
We know that China’s poor economic performance has curtailed demand for crude oil. It might not get better, but it would be difficult for it to get significantly worse.
Sentiment for China’s prospects are even worse than that of crude oil. Almost no one believes that Xi can turn it around. If he doesn’t, then it’s no problem for crude oil as there is so little expectation of any success, there would be little disappointment. On the other hand, it wouldn’t take much to surprise on the upside.
Although I am not counting on China to save crude, with the pessimism so thick, I’d rather be betting on the long side.