By Monday morning the price of oil had undergone a new surge of growth. The cost of Brent now stands at $64.23 (+1.2%) a barrel and WTI costs $58.2 a barrel. The reason for this growth in the quote price was news from China: the People’s Bank of China announced a 1% reduction in reserve requirements for banks. It’s due to function as a stimulation to support China’s weak economic growth. Now Chinese banks only need to hold 18.5% reserve funds. This is the lowest level for the past 5 years.
Earlier China announced a 7% GDP growth stat for Q1; no more, nor less than expected. The last time this value was 7% was in 2009 and doesn’t serve as the best news.
More than likely, by the middle of the trading session, investors will catch up with the news and the oil quotes will return to the $63.80 a barrel of Brent region. This isn’t the first time that China has attempted to nudge the economy with improvised stimulus. Whether or not, it hasn’t yet achieved the desired results.