According to trading data on Monday morning, oil prices rose by 1% after positive statistics on Japan and China, as well as in anticipation of new OPEC+ measures.
So, the price of December futures for the North sea oil mix Brent rose by 1.03% to $43.22 per barrel, and December futures for WTI oil went up to 1.4% and reached $40.69 per barrel.
Despite the increase in the incidence of COVID-19 worldwide, the mood of investors remains quite optimistic. The reason for this is statistics from China and Japan, which supported expectations for economic recovery. This should have a positive impact on demand.
The Chinese economy gained momentum in October, supported by growth in industrial production, investment in fixed assets and consumer spending. According to the National Bureau of Statistics of China, industrial production in the country in October increased in annual terms by 6.9% against the projected 6.5%.
Fixed capital investment increased by 1.8% in January to October compared to the same period in 2019, while economists had forecast growth of 1.6%.
A key indicator of consumer spending-retail sales in October showed an annual growth of 4.3% (after 3.3% in October), falling short of analysts forecasts of 4.6%. The pace of retail sales growth is significantly behind the overall pace of recovery in the Chinese economy due to quarantine measures against the background of the coronavirus pandemic.
The unemployment rate in China's major cities fell to 5.3% in October from 5.4% in September.
It is important to note that the Chinese economy has reached its annual employment growth target for the first ten months of 2020, creating more than 10 million jobs.
In addition, foreign direct investment in China increased by 18.4% (to $11.83 billion) in October compared to the same period of the previous year, showing growth for the seventh month in a row.
According to the latest reports from the statistics Bureau of the People's Republic of China, China's GDP grew by 0.7% in annual terms in the first three quarters of this year. At the same time, at the end of the first quarter, against the background of the coronavirus epidemic, this indicator fell by 6.8%, and the Chinese economy went into negative territory for the first time since 1992. In the second quarter, due to the improvement of the epidemiological situation, the country's GDP increased by 3.2%, and by 4.9% in the third.
Against the background of the growing incidence of COVID-19, the tightening of quarantine measures and their impact on the economy, the Chinese authorities decided not to set GDP growth goals in 2020. Most often, the tasks for the growth of gross domestic product are announced in the annual report of the Premier of the state Council of China Li Keqiang at the opening session of the Parliament, but this year this did not happen.
China's GDP growth rate at the end of 2019 was 6.1%, which was the lowest in the last thirty years. But this coincided with the official forecast of the authorities which assumed growth in the region of 6-6.5%. The country's total gross domestic product last year was 99.08 trillion yuan ($14.4 trillion). At the same time, China still retains the status of the world's second economy.
At the same time, Japan's GDP in terms of the year rose by 21.4% (experts expected an increase of 18.9%), demonstrating a record growth rate since 1968. In quarterly terms, growth was 5% (analysts predicted 4.4%). Both Japanese indicators were higher than expected. In the second quarter of 2020, Japan's GDP declined by 8.2% in quarterly terms. Recall that three previous quarters in a row in Japan saw the strongest decline in GDP since 1955 against the background of quarantine measures against the spread of coronavirus infection.
Personal consumption in the land of the rising sun increased by 4.7%. The volume of public investment in the reporting period increased by 0.4% in quarterly terms, while private investment decreased by 3.4%. Exports grew by 7% in quarterly terms, while imports fell by 9.8%.
In addition to encouraging news from Asia, investors are hoping that OPEC+ countries will renegotiate the terms of the deal to reduce production in connection with the COVID-19 pandemic. The organization's existing agreements suggest a reduction in production by 7.7 million barrels per day from August to the end of this year, and by 5.8 million barrels until the end of April 2022. The next meeting of the OPEC+ Committee is scheduled for November 17.