The recent rally in the price of oil from a monthly low of $72.40 to a high of $82.35 a barrel on China’s move away from Covid measures – which Bloomberg said “may spur daily consumption to hit a record in 2023” – stalled slightly this week.

“Bullish momentum seemed to slow down as oil erased gains from the past two sessions as earnings from multiple US companies disappointed, potentially signalling a gloomy short-term outlook for energy traders,” Bloomberg reported on Wednesday.

Reuters said that “an OPEC+ panel is likely to endorse the producer group’s current oil output policy when it meets next week, five OPEC+ sources said on Tuesday, as hopes of higher Chinese demand driving an oil price rally are balanced by worries over inflation and the global economy “.

The World Street Journal said China’s reopening could cause “cross currents” in the fight against inflation.

“China will likely consume more energy as its economy recovers, putting upward pressure on prices of oil and other commodities. At the same time, however, its reopening could ease supply-chain bottlenecks and enable factories to boost production, resolving some problems that contributed to higher inflation in 2022.

“The International Energy Agency said recently it expects China’s increasing appetite for oil to push overall global demand to a record of 101.7 million barrels each day, well above pre-Covid levels.

“If China’s reopening momentum holds, that could propel Brent crude oil prices to an average $100 a barrel by year-end from around $82 currently, according to economists from Societe Generale,” said WSJ. said: “Bank JP Morgan raised its forecast for Chinese crude demand but maintained its projection for a 2023 price average of $90 a barrel for Brent crude.”

Technical analysis indicates that the oil price has been in a bullish trend since early January, trading in a range last week from $78.15 to $82.35.

At the time of writing, oil was trading at $80.41 per barrel.

Investors may continue to short sell with a retracement of 50 per cent of the monthly low of $72.40 and high of $82.35, which is $77.37 a barrel.

For this week’s trading recommendation, investors can consider selling at $81 per barrel, setting the stop-loss at $82.50 and the take-profit at $77.50.