One of the key narratives this year for oil markets was that demand was set to grow in the second half of 2023, just as supply would start to fall. The initial optimism earlier in the year was tempered by the Silicon Vally Banking crisis which sent oil sharply lower to test its 100 and 200 EMA on the monthly chart.

However, the surprise announcement of a 1 million bpd Saudi production cut put a firm floor under prices. China’s latest GDP data may be the final shove that oil needs to see prices return back to the $90 region this year.

China’s GDP beats estimates

The headline GDP print came in at 4.5% y/y vs 4% expected. This was a solid reading and was further supported by the unemployment level that came in lower than expected at 5.3% vs 5.5%.

China’s throughput hits record levels

China is the world’s largest crude importer and many analysts are expecting record levels of consumption. The latest data shows refiners processing 63.29 million tons of crude for March. This is equal to roughly 15 million barrels per day which is the largest daily volume ever recorded, according to Bloomberg calculations.

On top of this, China’s aviation regulator says March air passenger numbers rose 197.4% y/y, so China’s re-opening trade could finally be underway. Does all this mean that US oil can hit $95 by year-end?